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CORPORATE
DIRECTORY
Gale Pacific Limited
Solicitors
ABN 80 082 263 778
Directors
Mr David Allman (Chairman)
Mr Nick Pritchard (Group Managing
Director)
Mr Peter Landos (Non Executive
Director)
Mr John Murphy (Non Executive
Director)
Mr George Richards (Non Executive
Director)
Company Secretary
Ms Sophie Karzis
Registered Office
145 Woodlands Drive,
Braeside, Victoria, 3195
T + 613 9518 3333
Norton Gledhill
Level 23, 459 Collins Street,
Melbourne, Victoria, 3000
T + 613 9614 8933
Auditor
Deloitte Touche Tohmatsu
550 Bourke Street,
Melbourne, Victoria, 3000
T + 613 9671 7000
Share Registery
Computershare
Yarra Falls, 452 Johnston Street,
Abbotsford, Victoria, 3067
T + 613 9415 4000
Website Address
www.galepacific.com
For personal use only
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INTRODUCTION
Corporate Directory
Chairman’s Letter
CORPORATE
Board of Directors
Senior Management
Corporate Governance
Directors’ Report
2
4
8
9
10
11
FINANCIAL RESULTS
Financial Results
28
2014 Annual General Meeting
The Annual General Meeting will be held on Friday 24 October 2014.
The Notice of Meeting and Proxy Form are separate items accompanying this
2014 Annual Report.
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 3
For personal use only
CHAIRMAN’S LETTER
Dear Shareholders,
Financial year 2014 has been a challenging year for Gale highlighted by continued sales and profit growth in our overseas divisions
and a number of challenges that have had a negative impact on our Australasian operations. Despite improved sales and profit
performance in the second half, we were unable to make up the shortfall from the first half of FY14. The company recorded a
decrease in net profit after tax of 9.4% to $8.2 million compared to $9.1 million for the previous corresponding period.
The results once again included very strong sales and profit growth for our Americas and Middle East businesses and a return to
growth in our International business. Our Australasian businesses grew sales despite very competitive trading conditions, however
profits declined as the businesses undertook significant organisational restructuring and continued to address the added complexity
that the integration of the Zone and Highgrove businesses have placed on the organisation.
We were again very pleased with the contribution from our Chinese manufacturing operations.
The key items of the results were;
Sales
EBITDA
Depreciation and amortisation
EBIT
Interest
Profit before tax
Tax
Reported profit after tax
Net cash provided by operating activities
Net debt
2013 / 2014
(A $ Million)
137.3
2012 / 2013
(A $ Million)
120.0
17.6
5.4
12.1
1.1
11.0
2.8
8.2
4.2
11.2
18.0
5.1
12.9
0.9
12.0
2.9
9.1
11.5
3.2
Diluted earnings per share
Final dividend per share
2.72 cents
1.35 cents
3.00 cents
1.35 cents
Change
(%)
14%
(2)%
6%
(6)%
22%
(8)%
(3)%
(9)%
(63)%
250%
(9)%
0%
Revenue Increase of 14% to $137.3 Million
Revenue for the year increased by 14% to $137.3 million . Sales revenues in local currencies grew by 27% in the USA and 14% in
the Middle East. Sales revenues increased in Australasia by 4%. We continued to invest in the development of our international
business by increasing direct marketing and selling activities, predominantly in Europe, South America and China.
EBITDA Decrease of 2% to $17.6 Million
Earnings before interest, tax, depreciation and amortisation (EBITDA) was slightly down on last year at $17.6 million for the year.
EBIT Decrease of 6% to $12.1 Million
Earnings before interest and tax (EBIT) was $12.1 million compared to $12.9 million for the previous corresponding period. The
reduction in EBIT was due to the decline in the Australasian business offset by improved earnings in the USA, Middle East and
China / International operations.
NPAT Decrease of 9% to $8.2 Million
Net profit after tax of $8.2 million for the financial year ended 30 June 2014 declined by 9.4% or $0.85 million compared to the
previous corresponding period.
4
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
Final Dividend Payment of 1.35 Cents Unfranked
The Directors are pleased to announce to shareholders that the Company has maintained the ordinary final dividend at 1.35 cents
per share. Dividends for the full year of 2.65 cents per share have been declared on diluted earnings of 2.72 cents per share.
However, the final dividend payment of 1.35 cents per share will be unfranked. The final dividend will be paid to shareholders on
1 December 2014.
Cash From Operations $4.2 Million
The ongoing profitability of the Company continued to generate strong cash flow from operations, however lower than in the
previous corresponding period due to working capital increases. Working capital management is, and will continue to be, a major
focus of the business and an overall improvement in working capital is expected moving forward.
The business recorded capital expenditure of $3.4 million for the year, an increase of $0.9 million on the prior year and includes
$1.3 million of expenditure for upgraded IT systems for implementation in the USA in 2014 / 2015. Dividends of $7.9 million were
paid to shareholders.
The company had net debt of $11.2 million as at 30 June 2014 compared to net debt of $3.2 million at 30 June 2013.
Organisational Restructure
The company has also announced a major organisational restructure which will streamline the Group's operations, shorten
reporting lines and reduce administrative duplication. As a result of this Mr Nick Pritchard, currently Managing Director of the
Australasian business, has been appointed Group Managing Director.
Nick joined Gale Pacific in August 2013 and has been leading the transformation of the Australasian business, which is expected to
report improved underlying earnings in FY2015. Previously, Nick was Chief Executive of the Australasian business of the US based
multi national Newell Rubbermaid which owns brands such as Parker, PaperMate, Waterman, DYMO, Rubbermaid and IRWIN
Tools.
As a result of this change Mr Peter McDonald, the current Managing Director and Chief Executive Officer, has left the company
and the Board would like to thank him for his considerable contribution, particularly during his eight years as Managing Director.
Review of Operations
While our businesses in the Americas and Middle East continued to perform well, our results in Australasia, which accounts for
58% of the group's sales, were unacceptable. The restructuring is aimed at creating a more focused and agile business with
improved customer service, lower costs and the ability to leverage Gale Pacific's technology, global scale and strong market
positions. Benefits are also expected in the group's marketing and supply chain, including inventory management.
Australasia (Australian Dollars)
Local Currency
Sales
EBITDA
FY14
(A$M’s)
79.9
1.7
FY13
(A$M’s)
76.9
6.2
Change
(%)
4%
(73)%
Australasian sales increased through both retail and commercial channels. In the retail channel, sales of Coolaroo and ZONE
branded products increased, but sales of Highgrove branded products were lower. In the commercial channel, higher sales of tank
liners and a large export contract for water fluming fabric offset lower demand for grain storage covers and mining fabric.
Margins were affected by higher raw material and logistics costs, the weaker Australian dollar and a change in the sales mix.
Earnings were also affected by costs related to the restructuring of the business, implementation of the new ERP system and
integration of the ZONE and Highgrove businesses.
Working capital increased by 35%, due partly to inventory carried over from the previous grain season. Inventory held in a major
retailer's stores was reduced during the year to more realistic levels; affecting Gale Pacific's revenue but, with the customer's sales
increasing satisfactorily, the impact is expected to be short term.
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 5
For personal use only
The new leadership team, appointed during the year, has made considerable progress with improving service levels, stabilising the
IT system and introducing systems and processes to improve management visibility and reduce costs. In addition, brand and
product strategies have been defined, there is now a strong pipeline of new products, a digital platform is under development, and
there are plans for investment to strengthen the company's core consumer brands.
Two significant product launches, an Everton range of glass pool fencing and balustrade, and a ZONE Interiors range of interior
window furnishings will take place in FY2015.
Americas (US Dollars)
Local Currency
Sales
EBITDA
FY14
(US$M’s)
32.9
3.0
FY13
(US$M’s)
25.9
2.1
Change
(%)
27%
43%
Improved consumer confidence, together with new products and effective seasonal marketing programs, resulted in higher sales
by most major retail customers, and additional listings were secured with some of the larger traditional and online retailers. Sales
of fabrics to the commercial sector also increased. Margins were slightly lower due to an increase in direct shipments to retailers
from China.
Additional investment in marketing and sales resources, combined with new product development, is expected to lead to further
sales growth. Two of the largest wholesale clubs have expanded their range commitments for FY2015.
Middle East (US Dollars)
Local Currency
Sales
EBITDA
FY14
(US$M’s)
11.1
2.4
FY13
(US$M’s)
9.7
1.9
Change
(%)
14%
26%
Construction activity and demand for architectural shade fabric in Gale Pacific's two main markets resulted in increased demand for
the company's commercial fabrics which have a reputation in the region for withstanding extreme heat. Sales to the UAE
increased by over 10% and sales to Saudi Arabia increased by over 20%. Margins in the region were also higher.
China and International Export Sales (US Dollars)
China (US Dollars)
Local Currency
Sales – International
Sales - Internal
EBITDA
FY14
(US$M’s)
8.3
38.9
9.0
FY13
(US$M’s)
7.6
28.6
7.6
Change
(%)
9%
36%
18%
Higher labour and material costs were offset by record volumes, increased efficiencies, improved yields and reduced waste levels
contributing to a record result from the China operations. EBITDA was US$9.0M, up 18% on prior year predominantly representing
margin on intercompany sales.
A new large scale tape extrusion line is currently being commissioned. This will increase tape extrusion output by approximately
50%, or 1,000 tonnes per annum. A number of knitting machines have been recommissioned to utilise this tape increase, further
increasing plant capacity and supporting future sales growth.
Other Overseas Markets (US Dollars)
Sales in Japan, South Africa, Israel and Italy all increased, although overall sales in Europe were lower. Further growth is expected
in Japan following the launch of new commercial products in FY2015, and business development activities in China, South America
and Europe are also expected to lead to higher sales.
6
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
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Cash Flow and Balance Sheet
Net operating cash flow remained strong at $4.2 million, but was lower than FY2013 ($11.5 million) due to an increase in working
capital.
Steps are being taken to reduce working capital and, while inventory will increase in the first half of FY2015 to support two major
product launches, an improvement is expected over the course of the year. Capital expenditure increased by $0.9 million to $3.4
million, due partly to investment of $1.3 million to upgrade IT systems.
Net debt at 30 June 2014 was $11.2 million, compared with $3.2 million at 30 June 2013, and the ratio of net debt to total funds
employed was 12.3% (30 June 2013: 3.7%).
Organic and Acquisition Growth
Gale maintains a strong continuous improvement culture, skilled and motivated employees and management, and an effective and
expanding international infrastructure. Innovation and product development continues to be a main focus as a driver of growth from
our core business base. The Company has ongoing strong cash generation and a strong balance sheet. Further complementary
acquisitions will continue to be assessed and actively pursued.
Management and Staff
On behalf of the Directors, we would like to thank all Gale employees for their hard work and commitment to grow and improve the
business. The company has faced a number of challenges in FY14 and a significant amount of restructuring has taken place in the
business to improve our operations and the service we provide to our customers. We welcome the new members to the team and
look forward to their contribution as we strive to profitably grow the organisation and drive for continuous improvements in
everything we do.
Outlook
Trading conditions are expected to remain largely consistent with the past year, but there are signs of increasing consumer
spending in the USA and demand in the Middle East remains stable, fuelled by construction activity. Margins are likely to remain
under pressure due to increasing material and labour costs in China and the strengthening of the renminbi.
The restructuring of the Australasian business is expected to lead to an improvement in Australasian earnings and, as a result, the
company's FY2015 underlying after-tax profit is expected to show an improvement on FY2014. The statutory result will include
non-recurring costs of approximately $2.5 million pretax ($1.75 million after tax) relating to the restructuring announced today and
the transformation process that is underway. This includes costs associated with the refresh and relaunch of the company’s ZONE
window furnishings range and the rebranding and marketing program relating to the company’s pool fencing and balustrade range.
We see strong growth opportunities in these product categories and the investments in these projects will considerably improve
the products, packaging, consumer shopping experience and marketing support programs.
Annual General Meeting
A notice of the Company’s Annual General Meeting to be held on 24 October 2014 and a voting form is enclosed with this report.
David Allman
Chairman
25 August 2014
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 7
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BOARD OF DIRECTORS
David Allman
B.Sc.
Chairman and Non Executive Director since November 2009.
David was Managing Director of McPherson’s Limited from 1995 to 2009 and prior to that he was
Managing Director of Cascade Group Limited for 7 years. Before this he held senior positions with
Elders IXL Limited and Castlemaine Tooheys Limited. David holds a degree in engineering and
prior to obtaining general management positions held managerial roles in production management,
finance and marketing. David is Chairman of McPherson’s Limited and Muir Engineering Pty Ltd.
David is the Chairman of the Company’s Nomination Committee and is a member of the Audit and
Risk and Remuneration Committees.
Nick Pritchard
B.Bus (Marketing)
Nick joined Gale in August 2013 as Managing Director Australia and New Zealand and was
appointed Group Managing Director in August 2014. Prior to joining Gale, Nick held senior
leadership positions at Newell Rubbermaid, most recently, Vice-President / General Manager –
Australia and New Zealand where he led all business segments for the Australia and New Zealand
markets. Nick has considerable local and international experience in brand development, business
consolidation and leading a highly profitable, high growth organisation. Nick was formerly
Marketing Manager and Product Manager of Gale Pacific between 1996 and 2003 and developed
the Coolaroo brand and many of the company’s highly successful products.
Peter Landos
B.Econ., CA
Non Executive Director in May 2014.
Peter is the Chief Operating Officer of the Thorney Investment Group of Companies with whom
he has been since September 2000, having previously worked at Macquarie Bank Limited. Peter
has extensive business and corporate experience specialising in advising boards and management
in mergers and acquisitions, divestments, business restructurings and capital markets. Peter is
also a Non Executive Chairman of Adacel Technologies Limited.
Peter is a member of the Company’s Nomination, Risk, Audit and Remuneration Committees.
John Murphy
CA, FCPA, B.Comm, M.Comm
Non Executive Director since August 2007.
John was the Managing Director of Investec Wentworth Private Equity Limited from 2002 until 30
September 2011. Also on that date John changed from being an executive to a non executive
director of Investec Bank (Australia) Limited. He is currently a director of a number of listed
companies including Ariadne Australia Limited, Vocus Communications Limited, Redflex Holdings
Limited and Kresta Holdings Limited.
John is the Chairman of the Company's Remuneration Committee and is a member of the Audit
and Risk and Nomination Committees.
George Richards
CPA
Non Executive Director since May 2004.
George was the Chief Executive of Mitre 10 South West Ltd during the 1990’s and was previously
the Managing Director of Cooper Tools, a market leader in hand tools manufacture and
distribution.George has had over 50 years experience in retail, marketing, manufacturing and
distribution. He is a board member of The Alfred Foundation and an Associate Member of the
Australian Society of Accountants (CPA).
George is Chairman of the Company’s Audit and Risk Committee and is a member of the
Nomination and Remuneration Committees.
8
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
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SENIOR MANAGEMENT
Howard Abbey
Chief Financial Officer (“CFO”)
Howard joined Gale in October 2013 and is an experienced CFO having held senior finance positions
within large, international businesses with significant sales, distribution and manufacturing operations.
Howard began his career with the BOC Group where he spent 18 years in both operational and
financial roles within Europe, Asia and the USA. He then spent 4 years in China as CFO for the ECCO
Group where he played a leading role in the establishment and subsequent management of a new
Chinese manufacturing facility. Prior to joining Gale he was CFO for Australian Defence Apparel Pty
Ltd. Howard holds a Masters degree in Electrical & Mechanical Engineering and is a CPA and member
of the Chartered Institute of Management Accountants.
Martin Denney
Managing Director, USA
Martin joined Gale in June 2006 and has strong commercial and strategic planning skills gained over
20 years across a range of industries including food and beverage, distribution, manufacturing,
technology and property development. He has held senior management roles including General
Manager of Socomin, a branded food import and distribution division of Pacific Dunlop Group (turnover
A$40 million). Other roles include National Sales and Marketing Manager at Dennis Family Corporation
(turnover A$250 million), and Business Development Manager at Adacel Technologies.
Bernie Wang
Managing Director, China
Bernie joined Gale in February 2009 and has 20 years experience in the chemical fibre textile industry.
Bernie started his career with a large tyre cord manufacturer in China as a spinning process engineer
and was promoted to Plant Manager and finally to Technical Director. Bernie then spent four years
with DuPont Fibre as Operations Manager and Maintenance Manager. Before joining Gale, he worked
for 5 years as General Manager for a German company in China where he was responsible for the
design and construction of the factory and the establishment of manufacturing operations.
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 9
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CORPORATE GOVERNANCE
The Company’s Directors and management are committed to conducting the Group’s business in an ethical manner and in
accordance with the highest standards of corporate governance. The Company has adopted and substantially complies with the
ASX Corporate Governance Principles and Recommendations (Third Edition) (Recommendations) to the extent appropriate to the
size and nature of the Group’s operations.
The Company has prepared a statement which sets out the corporate governance practices that were in operation throughout the
financial year for the Company, identifies any Recommendations that have not been followed, and provides reasons for not
following such Recommendations (Corporate Governance Statement).
In accordance with ASX Listing Rules 4.10.3 and 4.7.4, the Corporate Governance Statement will be available for review on Gale
Pacific’s website (www.galepacific.com), and will be lodged together with an Appendix 4G with ASX at the same time that this
Annual Report is lodged with ASX.
The Appendix 4G will particularise each Recommendation that needs to be reported against by Gale Pacific, and will provide
shareholders with information as to where relevant governance disclosures can be found.
The Company’s corporate governance policies and charters are all available on Gale Pacific’s website (www.galepacific.com).
10
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
DIRECTORS’ REPORT
The Directors of Gale Pacific Limited (“the Company”) present their annual financial report for the Company and its
controlled entities (“the Group”) for the financial year ended 30 June 2014.
The Directors in office at any time during or since the end of the year to the date of this report are:
David Allman, B.Sc.
Chairman and Non Executive Director since November 2009
David was Managing Director of McPherson’s Limited from 1995 to 2009 and prior to that he was Managing Director of Cascade
Group Limited for 7 years. Before this he held senior positions with Elders IXL Limited and Castlemaine Tooheys Limited. David
holds a degree in engineering and prior to obtaining general management positions held managerial roles in production
management, finance and marketing. David is Chairman of McPherson’s Limited and Muir Engineering Pty Ltd.
Other than the above, no other directorships of listed companies were held by David at anytime during the three years prior to 30
June 2014.
David is Chairman of the Company’s Nomination Committee and is a member of the Audit and Risk and Remuneration
Committees.
Peter McDonald, B.Bus (Marketing)
Managing Director and Chief Executive Officer from April 2006 and Executive Director from 1998 until 22 August 2014
Peter was appointed Managing Director and Chief Executive Officer of Gale in April 2006. Peter joined Gale in 1988 and was
appointed as an Executive Director of the Company in 1998. Peter has held the positions of Product Manager, National Marketing
Manager, National Sales and Marketing Manager, Chief Operating Officer and Managing Director of Gale’s United States
operations.
No other directorships of listed companies were held by Peter at any time during the three years prior to 30 June 2014.
Nick Pritchard B Bus (Marketing)
Group Managing Director appointed 22 August 2014
Nick joined Gale in August 2013 as Managing Director Australia and New Zealand and was appointed Group Managing Director on
22 August 2014. Prior to joining Gale, Nick held senior leadership positions at Newell Rubbermaid, most recently, Vice-President /
General Manager – Australia and New Zealand where he led all business segments for the Australia and New Zealand markets.
Nick has considerable local and international experience in brand development, business consolidation and leading a highly
profitable, high growth organisation. Nick was formerly Marketing Manager and Product Manager of Gale Pacific between 1996 and
2003 and developed the Coolaroo brand and many of the company’s highly successful products.
Peter Landos, B.Econ., CA
Non Executive Director since May 2014
Peter is the Chief Operating Officer of the Thorney Investment Group of Companies with whom he has been since September
2000, having previously worked at Macquarie Bank Limited. Peter has extensive business and corporate experience specialising in
advising boards and management in mergers and acquisitions, divestments, business restructurings and capital markets. Peter is
also a Non Executive Chairman of Adacel Technologies Limited.
In the three years prior to 30 June 2014 Peter was also a director of McPherson’s Group Limited and Rattoon Holdings Limited.
Peter is a member of the Company’s Nomination, Risk, Audit and Remuneration Committees.
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 11
For personal use only
John Murphy, CA, FCPA, B.Comm, M.Comm
Non Executive Director since August 2007
John was the Managing Director of Investec Wentworth Private Equity Limited from 2002 until 30 September 2011. Also on that
date John changed from being an executive to a non executive director of Investec Bank (Australia) Limited. He is currently a
director of a number of listed companies including Ariadne Australia Limited, Vocus Communications Limited, Redflex Holdings
Limited and Kresta Holdings Limited.
In the three years prior to 30 June 2014 John was also a director of Clearview Wealth Limited.
John is the Chairman of the Company's Remuneration Committee and is a member of the Audit and Risk and Nomination
Committees.
George Richards, CPA
Non Executive Director since May 2004
George was the Chief Executive of Mitre 10 South West Ltd during the 1990’s and was previously the Managing Director of
Cooper Tools, a market leader in hand tools manufacture and distribution. George has had over 50 years experience in retail,
marketing, manufacturing and distribution. He is a board member of The Alfred Foundation and an Associate Member of the
Australian Society of Accountants (CPA).
No other directorships of listed companies were held by George at any time during the three years prior to 30 June 2014.
George is Chairman of the Company’s Audit and Risk Committee and is a member of the Nomination and Remuneration
Committees.
Ms Sophie Karzis, B Juris LLB
Company Secretary
Sophie was appointed as Company Secretary in June 2004. Sophie is a practising lawyer who holds roles at a number of public and
private companies.
Nature of Operations and Principal Activities
The Group’s principal activities in the course of the financial year were the marketing, sales, manufacture and distribution of
branded screening, shading and home improvement products to global markets.
Review and Results of Operations
Revenue for the year increased by 14% to $137.3 million . Sales revenues in local currencies grew by 27% in the USA and 14% in
the Middle East. Sales revenues increased in Australasia by 4%. We continued to invest in the development of our international
business by increasing direct marketing and selling activities, predominantly in Europe, South America and China.
Earnings before interest, tax, depreciation and amortisation (EBITDA) was slightly down on last year at $17.6 million for the year.
Earnings before interest and tax (EBIT) was $12.1 million compared to $12.9 million for the previous corresponding period. The
reduction in EBIT was due to the decline in the Australasian business offset by improved earnings in the USA, Middle East and
China / International operations.
Net profit after tax of $8.2 million for the financial year ended 30 June 2014 declined by 9.4% or $0.85 million compared to the
previous corresponding period.
The Directors are pleased to announce to shareholders that the Company has maintained the ordinary final dividend at 1.35 cents
per share. Dividends for the full year of 2.65 cents per share have been declared on diluted earnings of 2.72 cents per share. The
final dividend payment of 1.35 cents per share will be unfranked. The final dividend will be paid to shareholders on 1 Decemberr
2014.
12
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
The ongoing profitability of the Company continued to generate strong cash flow from operations, however lower than in the
previous corresponding period due to working capital increases. Working capital management is, and will continue to be, a major
focus of the business and an overall improvement in working capital is expected moving forward.
The business recorded capital expenditure of $3.4 million for the year, an increase of $0.9 million on the prior year and includes
$1.3 million of expenditure for upgraded IT systems for implementation in the USA in 2014 / 2015. Dividends of $7.9 million were
paid to shareholders.
The company had net debt of $11.2 million as at 30 June 2014 compared to net debt of $3.2 million at 30 June 2013.
The company has also announced a major organisational restructure which will streamline the group's operations, shorten reporting
lines and reduce administrative duplication. As a result of this Mr Nick Pritchard, currently Managing Director of the Australasian
business, has been appointed Group Managing Director.
Nick joined Gale Pacific in August 2013 and has been leading the transformation of the Australasian business, which is expected to
report improved underlying earnings in FY2015. Previously, Nick was Chief Executive of the Australasian business of the US based
multi-national Newell Rubbermaid which owns brands such as Parker, PaperMate, Waterman, DYMO, Rubbermaid and IRWIN
Tools.
As a result of this change Mr Peter McDonald, the current Managing Director and Chief Executive Officer, has left the company
and the Board would like to thank him for his considerable contribution, particularly during his eight years as Managing Director.
While our businesses in the Americas and Middle East continued to perform well, our results in Australasia, which accounts for
58% of the group's sales, were unacceptable. The restructuring is aimed at creating a more focused and agile business with
improved customer service, lower costs and the ability to leverage Gale Pacific's technology, global scale and strong market
positions. Benefits are also expected in the group's marketing and supply chain, including inventory management.
Australasian sales increased through both retail and commercial channels. In the retail channel, sales of Coolaroo and ZONE
branded products increased, but sales of Highgrove branded products were lower. In the commercial channel, higher sales of tank
liners and a large export contract for water fluming fabric offset lower demand for grain storage covers and mining fabric.
Margins were affected by higher raw material and logistics costs, the weaker Australian dollar and a change in the sales mix.
Earnings were also affected by costs related to the restructuring of the business, implementation of the new ERP system and
integration of the ZONE and Highgrove businesses.
Working capital increased by 35%, due partly to inventory carried over from the previous grain season. Inventory held in a major
retailer's stores was reduced during the year to more realistic levels; affecting Gale Pacific's revenue but, with the customer's sales
increasing satisfactorily, the impact is expected to be short term.
The new leadership team, appointed during the year, has made considerable progress with improving service levels, stabilising the
IT system and introducing systems and processes to improve management visibility and reduce costs. In addition, brand and
product strategies have been defined, there is now a strong pipeline of new products, a digital platform is under development, and
there are plans for investment to strengthen the company's core consumer brands.
Two significant product launches, an Everton range of glass pool fencing and balustrade, and a ZONE Interiors range of interior
window furnishings will take place in FY2015.
Improved consumer confidence, together with new products and effective seasonal marketing programs, resulted in higher sales
by most major retail customers, and additional listings were secured with some of the larger traditional and online retailers. Sales
of fabrics to the commercial sector also increased. Margins were slightly lower due to an increase in direct shipments to retailers
from China.
Additional investment in marketing and sales resources, combined with new product development, is expected to lead to further
sales growth. Two of the largest wholesale clubs have expanded their range commitments for FY2015.
Construction activity and demand for architectural shade fabric in Gale Pacific's two main markets resulted in increased demand for
the company's commercial fabrics which have a reputation in the region for withstanding extreme heat. Sales to the UAE
increased by over 10% and sales to Saudi Arabia increased by over 20%. Margins in the region were also higher.
Higher labour and material costs were offset by record volumes, increased efficiencies, improved yields and reduced waste levels
contributing to a record result from the China operations. EBITDA was $9.0M, up 18% on prior year predominantly representing
margin on intercompany sales.
A new large scale tape extrusion line is currently being commissioned. This will increase tape extrusion output by approximately
50%, or 1,000 tonnes per annum. A number of knitting machines have been recommissioned to utilise this tape increase, further
increasing plant capacity and supporting future sales growth.
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 13
For personal use only
Sales in Japan, South Africa, Israel and Italy all increased, although overall sales in Europe were lower. Further growth is expected
in Japan following the launch of new commercial products in FY2015, and business development activities in China, South America
and Europe are also expected to lead to higher sales.
Net-operating cash flow remained strong at $4.2 million, but was lower than FY2013 ($11.5 million) due to an increase in working
capital.
Steps are being taken to reduce working capital and, while inventory will increase in the first half of FY2015 to support two major
product launches, an improvement is expected over the course of the year. Capital expenditure increased by $0.9 million to $3.4
million, due partly to investment of $1.3 million to upgrade IT systems.
Net debt at 30 June 2014 was $11.2 million, compared with $3.2 million at 30 June 2013, and the ratio of net debt to total funds
employed was 12.3% (30 June 2013: 3.7%).
Trading conditions are expected to remain largely consistent with the past year, but there are signs of increasing consumer
spending in the USA and demand in the Middle East remains stable, fuelled by construction activity. Margins are likely to remain
under pressure due to increasing material and labour costs in China and the strengthening of the renminbi.
The restructuring of the Australasian business is expected to lead to an improvement in Australasian earnings and, as a result, the
company's FY2015 underlying after tax profit is expected to show an improvement on FY14. The statutory result will include non
recurring costs of approximately $2.5 million pre tax ($1.75 million after tax) relating to the restructuring announced today and costs
associated with the refresh and relaunch of the company’s ZONE window furnishings range and the rebranding and marketing
program build relating to the company’s pool fencing and balustrade range. We see strong growth opportunities in these product
categories and the investments in these projects will considerably improve the products, packaging, consumer shopping
experience and marketing support programs.
State of Affairs
There were no significant changes in the state of affairs of the Group during the financial year.
Events Subsequent to Balance Date
The Company has announced a major organisational restructure which will streamline the Group's operations, shorten reporting
lines and reduce administrative duplication. Nick Pritchard, previously Managing Director of the Australasian business, has been
appointed Group Managing Director. As a result of this change Peter McDonald, the previous Managing Director and Chief
Executive Officer, has left the company.
Likely Developments
Disclosure of information regarding likely developments in the operations of the Group in future financial years has been made in
part in the Chairman’s Letter of this Annual Report. Any further such disclosure and the expected results of those operations is
likely to result in unreasonable prejudice to the Group and has accordingly not been disclosed in this report.
Environmental Regulation and Performance
The Group’s operations are not subject to any significant environmental regulations under the Commonwealth or State legislation.
The Directors believe that the Group has adequate systems in place for the management of its environmental requirements and is
not aware of any breach of those environmental requirements as they apply to the Group.
14
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
Dividends
Dividends paid to members during the financial year were as follows:
Final ordinary dividend for the year ended 30 June 2013 of 1.35 cents per share paid on 4 October 2013
Interim ordinary dividend for the year ended 30 June 2014 of 1.30 cents per share paid on 10 April 2014
2013 / 2014
($000)
2012 / 2013
($000)
4,016
3,867
3,693
3,858
In addition to the above dividends, since the end of the financial year the Directors have declared the payment of a final ordinary
dividend of 1.35 cents per share to be paid on 1 December 2014. This dividend payment will be unfranked.
For the full year dividends of 2.65 cents per share have been declared on diluted earnings of 2.72 cents per share. This maintains
the full year ordinary dividend in line with last year.
Share Based Payments
Performance Rights
The number of performance rights on issue at the date of this report is 3,100,000. No amount is payable on the vesting of a
performance right. Each performance right entitles the holder to one (1) ordinary share in Gale Pacific Limited in the event that the
performance right is exercised. Performance rights carry no rights to dividends and no voting rights.
3,150,000 performance rights were granted to Executives apart from the Managing Director on 20 September 2012. As of 30 June
2014, 1,200,000 of these performance rights lapsed as the performance hurdles were not met. A further 1,125,000 performance
rights lapsed during the year to 30 June 2014 as the relevant personnel ceased employment with the company.
3,500,000 performance rights were granted to other management personnel on 20 September 2012. As of 30 June 2014,
2,075,000 of these performance rights lapsed as the performance hurdles were not met. A further 675,000 performance rights
lapsed during the year to 30 June 2014 as the relevant personnel ceased employment with the company.
1,200,000 performance rights were granted to the Managing Director on 26 November 2012. As of 30 June 2014, 600,000 of these
performance rights lapsed as the performance hurdles were not met. The remaining 600,000 performance rights lapsed on 22
August 2014 as the Managing Director ceased employment with the company.
The remaining performance rights will vest subject to a continuation of employment to 20 September 2015 and the satisfying of
relevant performance hurdles based on the Group’s diluted earnings per share over the three year period from 1 July 2012 to 30
June 2015. None of these performance rights can vest until 20 September 2015 and expire on 20 September 2022.
750,000 performance rights were granted to one Executive member on 3 October 2013. As of 30 June 2014, 187,500 of these
performance rights lapsed as the performance hurdles were not met. 550,000 performance rights were granted to other
management personnel outside the key management group on 3 October 2013. As of 30 June 2014, 137,500 of these
performance rights lapsed as the performance hurdles were not met.
The remaining performance rights will vest subject to a continuation of employment to 31 August 2016 and the satisfying of
relevant performance hurdles based on the Group’s diluted earnings per share over the three year period from 1 July 2013 to 30
June 2016. None of these performance rights can vest until 31 August 2016 and expire on 3 October 2023.
On 5 July 2013 the Company issued 735,000 fully paid ordinary shares in the company relating to performance rights issued to
Executives on 15 August 2010 and after satisfying the relevant performance hurdles for the period from 1 July 2010 to 30 June
2013.
Further details of the options and performance rights movements during the reporting period are disclosed in the Remuneration
Report.
Indemnification of Officers and Auditors
During the financial year, the Company paid a premium in respect of a contract insuring the Directors of the Company, the
Company Secretary and all Executive Officers of the Company and of any related body corporate against a liability incurred as a
Director, Secretary or Executive Officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer or auditor of the
Company or of any related body corporate against a liability incurred as an officer or auditor.
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 15
For personal use only
Directors’ Shareholdings
The following table sets out each Director’s relevant interest in shares, options and performance rights in shares of the Company
as at the date of this report.
Directors
D Allman
P Landos
P McDonald
J Murphy
N Pritchard
G Richards
Fully Paid Ordinary Shares
Options
Performance Rights
1,000,000
Nil
2,337,874
2,816,599
Nil
491,899
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
562,500
Nil
Directors’ Meetings
The table below sets out the attendance by Directors.
Directors’ Meetings
Audit and Risk Committee
Meetings
Remuneration Committee
Meetings
Nomination Committee
Meetings
Directors
D Allman
P Landos
P McDonald
J Murphy
G Richards
No of
Meetings
Eligible to
Attend
11
3
11
11
11
Attended
11
3
11
11
10
No of
Meetings
Eligible to
Attend
2
-
-
2
2
Attended
2
-
2
2
2
No of
Meetings
Eligible to
Attend
1
-
-
1
1
Attended
1
-
1
1
1
No of
Meetings
Eligible to
Attend
1
-
-
1
1
Attended
1
-
1
1
1
By Board invitation, Peter McDonald also attended all of the Audit and Risk, Remuneration and Nomination Committee meetings.
The members of the Audit and Risk Committee are David Allman, Peter Landos, John Murphy and George Richards. The Chairman
of the Audit and Risk Committee is George Richards.
The members of the Remuneration Committee are David Allman, Peter Landos, John Murphy and George Richards. The Chairman
of the Remuneration Committee is John Murphy.
The members of the Nomination Committee are David Allman, Peter Landos, John Murphy and George Richards. The Chairman of
the Nomination Committee is David Allman.
Remuneration Report
This report contains the remuneration arrangements in place for Directors and Executives of the Group.
The Remuneration Committee reviews the remuneration packages of all Directors and Executive Officers on an annual basis and
makes recommendations to the Board. Remuneration packages are reviewed with due regard to performance and other relevant
factors, and advice is sought from external advisors in relation to their structure.
The Group’s remuneration policy is based on the following principles:
(cid:131)
(cid:131)
(cid:131)
Provide competitive rewards to attract high quality executives;
Provide an equity incentive for senior executives that will provide an incentive to executives to align their interests with
those of the Group and its shareholders; and
Ensure that rewards are referenced to relevant employment market conditions.
Remuneration packages contain the following key elements:
(cid:131)
(cid:131)
(cid:131)
Primary benefits – salary / fees;
Benefits, including the provision of motor vehicles and incentive schemes, including performance rights; and
Performance rights, if the performance criteria and any Board discretion are satisfied, entitle an executive to be issued
shares in the Company at no cost to the executive. Shares are issued subsequently after the time all performance rights
vesting conditions are met
16
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
Relationship between the remuneration policy and company performance
The table below set out summary information about the consolidated entity’s earnings and movements in shareholder wealth for
the five years to 30 June 2014:
Sales
Net profit before tax
Net profit after tax
30 June 2014
30 June 2013
30 June 2012
30 June 2011
30 June 2010
137,304
119,988
110,473
95,580
98,811
10,988
8,233
12,016
9,084
11,454
8,477
9,061
7,100
8,071
6,011
Share price at start of year
26 cents
24 cents
21 cents
16 cents
8 cents
Share price at end of year
23 cents
26 cents
24 cents
21 cents
15 cents
Interim dividend
Final dividend
1.30 cents
1.20 cents
1.20 cents
1.00 cents
1.00 cents
1.35 cents
1.35 cents
1.20 cents
1.00 cents
1.00 cents
Basic earnings per share
2.77 cents
3.07 cents
2.86 cents
2.42 cents
2.15 cents
Diluted earnings per share
2.72 cents
3.00 cents
2.45 cents
2.20 cents
2.08 cents
Remuneration Practices
The Group policy for determining the nature and amount of emoluments of Board members and Senior Executives is as follows.
The remuneration structure for Executive Officers, including Executive Directors, is based on a number of factors including length
of service, particular experience of the individual concerned, and overall performance of the Group. The contracts of service
between the Group and Executive Directors and Executives are on a continuing basis, the terms of which are not expected to
change in the immediate future. Upon retirement Executive Directors and Executives are paid employee benefit entitlements
accrued to date of retirement. Payment of bonuses, and other incentive payments are made at the discretion of the Remuneration
Committee to Key Executives of the Group based predominantly on an objective review of the Group’s financial performance, the
individuals’ achievement of stated financial and non financial targets and any other factors the Committee deems relevant. Non
Executive Directors receive a fee for being Directors of the Company and do not participate in performance based remuneration.
Remuneration Structure
In accordance with best practice corporate governance, the structure of Non Executive Directors and Senior Managers
remuneration is separate and distinct.
Non Executive Director Remuneration
Objective
The Board seeks to set remuneration at a level which provides the Company with the ability to attract and retain directors of
relevant experience and skill, whilst incurring costs which are acceptable to shareholders.
Structure
The Company’s Constitution and the Australian Securities Exchange Listing Rules specify that the aggregate remuneration of Non
Executive Directors shall be determined from time to time by a general meeting. An amount not exceeding the amount determined
is then divided between the Directors as agreed. The last determination was at the Annual General Meeting held on 26 October
2012 when shareholders’ approved the Company’s constitution which provides for an aggregate remuneration of $500,000 per
annum. The amount of the aggregate remuneration and the manner in which it is apportioned is reviewed periodically. The Board
considers fees paid to Non Executive Directors of comparable companies when undertaking this review process.
Each Non Executive Director receives a fee for being a Director of the Company and does not participate in performance based
remuneration.
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 17
For personal use only
Senior Manager and Executive Director Remuneration
Objective
The Group aims to reward executives with a level and mix of remuneration commensurate with their position and responsibilities
within the Group. The objective of the remuneration policy is:
(cid:131)
(cid:131)
(cid:131)
Reward executives for Group and individual performance;
Align the interests of the executives with those of the shareholders; and
Ensure that total remuneration is competitive by market standards.
Structure
In determining the level and make up of executive remuneration, the Remuneration Committee reviews reports detailing market
levels of remuneration for comparable roles. Remuneration consists of fixed and variable elements.
(a).
Share Based Payments
The Group maintains a performance rights scheme for certain staff and executives, including the Managing Director, as
approved by shareholders at an annual general meeting. These schemes are designed to reward key personnel when the
Group meets performance hurdles increasing the diluted earnings per share and relate to:
(cid:131)
(cid:131)
Improvement in earnings per share; and
Improvement in return to shareholders.
735,000 performance rights vested on 30 June 2013 and the shares were subsequently issued to settle the rights on 5 July
2013.
The number of unissued ordinary shares under the performance rights scheme at 30 June 2014 was 3,700,000. The
performance rights granted on 20 September 2012 and 26 November 2012 will not vest until 20 September 2015. The
performance rights granted on 3 October 2013 will not vest until 31 August 2016. Each performance right entitles the
holder one (1) ordinary share in Gale Pacific Limited when exercised and is subject to the satisfying of relevant performance
hurdles based on improvements in the Group’s diluted earnings per share.
Options and performance rights issued to executives during the year were issued in accordance with the Group’s
remuneration policy which:
(cid:131)
(cid:131)
(cid:131)
Reward executives for Group and individual performance;
Align the interests of the executives with those of the shareholders; and
Ensure that total remuneration is competitive by market standards.
(b).
Cash Bonuses
One year short term performance cash bonus payments are awarded in accordance with the company’s remuneration
policy. The budget targets for each business unit and the company overall is established each year by the Board. The
performance criteria include sales and earnings before interest and tax growth and working capital management. For
corporate executives, the performance criteria include growth in earnings before interest and tax and profit after tax.
Key Management Personnel of the Group Who Held Office During the Year
Directors
D Allman (Chairman, Non Executive)
P Landos (Non Executive)
J Murphy (Non Executive)
G Richards (Non Executive)
P McDonald (Managing Director and Chief Executive Officer)
Executives
H Abbey (Chief Financial Officer)
J Cox (Chief Financial Officer) (Retired on 31 October 2013)
A Haidar (Regional Manager (Middle East)
M Denney (Managing Director USA)
S McPherson (Managing Director Australasia) (Resigned 9 July 2013)
N Pritchard (Managing Director Australasia)
A Scott (General Manager International Sales and Marketing)
B Wang (Managing Director China)
18
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
The following table discloses the remuneration of the Directors of the Company:
2013 / 2014
Short Term Benefits
Post
Share Based
Total
Performance Related
Employment
Payments
Directors
Salary &
Bonus
Non
Super
Performance
Total
Performance
Fees
$
Executive Directors
P McDonald 1
495,500
Non Executive Directors
D Allman
G Richards
J Murphy
P Landos 2
Total
114,416
51,314
77,803
11,442
750,475
Monetary
$
-
-
-
-
-
-
$
-
-
-
-
-
-
$
25,000
10,584
33,686
7,197
1,058
77,525
Rights
$
$
%
Rights
%
-
-
-
-
-
-
520,500
125,000
85,000
85,000
12,500
828,000
-
-
-
-
-
-
-
-
-
-
2012 / 2013
Short Term Benefits
Post
Share Based
Total
Performance Related
Employment
Payments
Directors
Salary &
Bonus
Non
Super
Performance
Total
Performance
Fees
$
Executive Directors
P McDonald
480,339
Non Executive Directors
D Allman
G Richards
J Murphy
Total
114,679
77,982
77,982
750,982
Monetary
$
-
-
-
-
-
$
-
-
-
-
-
$
Rights
$
$
25,000
14,750
520,089
10,321
7,018
7,018
49,357
-
-
-
125,000
85,000
85,000
14,750
815,089
%
2.8
-
-
-
Rights
%
2.8
-
-
-
The following table discloses the remuneration of the Group’s key management personnel:
2013 / 2014
Short Term Benefits
Post
Share Based
Termination
Total
Performance Related
Employment
Payments
Benefits
Key
Salary &
Bonus
Non
Super
Rights
Total
Rights
Management
Personnel
J Cox 3
N Pritchard 4
H Abbey 5
M Denney 6
B Wang 7
A Scott 8
Total
Fees
$
158,966
286,173
186,205
292,099
216,800
183,302
Monetary
$
-
-
-
$
-
-
-
76,484
53,522
-
13,135
14,351
-
1,323,545
130,006
27,486
$
8,333
20,734
17,224
-
-
16,956
63,247
$
-
-
-
-
-
-
-
50,000
-
-
-
-
-
-
$
217,299
306,907
203,429
381,718
284,673
200,258
1,594,284
%
-
-
-
20.0%
18.8%
-
%
-
-
-
-
-
-
2012 / 2013
Short Term Benefits
Post
Share Based
Total
Performance Related
Employment
Payments
Key
Salary &
Bonus
Non
Super
Rights
Total
Rights
Management
Personnel
J Cox
Fees
$
301,351
Monetary
$
-
$
-
M Denney
256,106
114,446
8,266
S McPherson 9
A Scott
B Wang
Total
314,066
178,372
179,560
-
-
69,328
1,229,455
183,744
-
-
13,955
22,221
$
25,000
-
25,000
16,053
-
66,053
$
-
6,760
9,219
6,760
6,760
29,499
$
326,351
385,578
348,285
201,185
269,603
1,531,002
%
-
31.4%
2.6%
3.4%
28.2%
%
-
1.8%
2.6%
3.4%
2.5%
1 Mr McDonald left the company on 22 August 2014.
2 Mr Landos is a Non Executive Director. He commenced on 1 May 2014.
3 Mr Cox retired on 31 October 2013.
4 Mr Pritchard commenced employment as Managing Director – Australia & New Zealand on 19 August 2013 and became a Director on 22 August 2014.
5 Mr Abbey is the Chief Financial Officer. He commenced employment on 7 October 2013.
6 Mr Denney is based in the United States of America and remunerated in United States dollars converted to Australian dollars in the table above.
7 Mr Wang is based in China and remunerated in Chinese renminbi converted to Australia dollars in the above table.
8 Mr Scott is the General Manager International Sales and Marketing and is located in Australia.
9 Mr McPherson was the Managing Director – Australia & New Zealand. He resigned on 9 July 2013.
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 19
For personal use only
Directors’ and Executives’ Equity Holdings:
Fully Paid Ordinary Shares
2013 / 2014
Executive Directors
P McDonald
Non Executive Directors
D Allman
J Murphy
G Richards
P Landos
Executives
J Cox
H Abbey
M Denney
N Pritchard
A Scott
B Wang
Total
2012 / 2013
Balance
30 June 2013
Granted as
Compensation
No.
No.
Received on
Exercise of
Options
No.
Other
Movements
Balance
30 June 2014
No.
No.
2,337,874
1,000,000
3,684,579
491,899
-
1,448,472
-
800,000
-
-
1,500,000
11,262,824
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
245,000
-
-
-
(867,980)
-
-
(472,824)
-
-
-
-
-
245,000
(1,340,804)
2,337,874
1,000,000
2,816,599
491,899
-
975,648
-
800,000
-
245,000
1,500,000
10,167,020
Balance
30 June 2012
Granted as
Compensation
No.
No.
Received on
Exercise of
Options
No.
Executive Directors
P McDonald
Non Executive Directors
D Allman
J Murphy
G Richards
Executives
J Cox
S McPherson
M Denney
A Scott
B Wang
Total
Share Based Compensation
3,228,105
-
1,000,000
491,899
2,000,000
1,500,000
1,500,000
-
1,500,000
11,220,004
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Other
Movements
Balance
30 June 2013
No.
No.
(890,231)
2,337,874
1,000,000
2,684,579
-
(551,528)
(1,000,000)
(700,000)
-
-
542,820
1,000,000
3,684,579
491,899
1,448,472
500,000
800,000
-
1,500,000
11,762,824
The terms and conditions of each grant of performance rights granted but not vested as at 30 June 2014 affecting remuneration in
the current or a future reporting period are as follows:
Grant Date
3 October 2013
26 November 2012
20 September 2012
Value per performance rights at grant date
0.1994
0.1475
0.1475
Each performance right entitles the holder to one (1) ordinary share in Gale Pacific in the event that the performance rights are
exercised. Performance rights carry no rights to dividends and no voting rights.
The performance rights granted on 20 September 2012 and 26 November 2012 are subject to a continuation of employment to 20
September 2015 and then the satisfying of relevant performance hurdles based on improvements in the Group’s diluted earnings
per share over the three year period 1 July 2012 to 30 June 2015. None of these performance rights can vest until 20 September
2015 and expire on 20 September 2022.
The performance rights granted on 3 October 2013 are subject to a continuation of employment to 31 August 2016 and then the
satisfying of relevant performance hurdles based on improvements in the Group’s diluted earnings per share over the three year
period 1 July 2013 to 30 June 2016. None of these performance rights can vest until 31 August 2016 and expire on 3 October
2023.
20
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
Directors’ and Executives’ Equity Holdings, Compensation Options and Performance Rights:
Granted and Vested During the Year
2013 / 2014
Vested
Number
Granted
Number
Grant Date
Terms and Conditions for Each Grant
Exercise
Price
Expiry Date
First
Exercise
Date
Last
Exercise
Date
Value Per
Option /
Right at
Grant Date
Executive Directors (Performance Rights)
None
Non Executive Directors
None
Executives (Performance Rights)
N Pritchard
-
750,000
03/10/2013
$0.1994
Nil
31/08/2023
31/08/2016
03/10/2023
Other Management Personnel (Performance Rights)
Other
Management
Total
-
-
550,000
03/10/2013
$0.1994
Nil
31/08/2023
31/08/2016
03/10/2023
1,300,000
2012 / 2013
Vested
Number
Granted
Number
Grant Date
Executive Directors (Performance Rights)
Terms and Conditions for Each Grant
Exercise
Price
Expiry Date
First
Exercise
Date
Last
Exercise
Date
Value Per
Option /
Right at
Grant Date
P McDonald
-
1,200,000
26/11/2012
$0.1475
Nil
20/09/2022
20/09/2015
20/09/2022
Non Executive Directors
None
Executives (Performance Rights)
J Cox
S McPherson
M Denney
A Scott
B Wang
-
-
-
750,000
20/09/2012
$0.1475
750,000
20/09/2012
$0.1475
550,000
20/09/2012
$0.1475
245,000
550,000
20/09/2012
$0.1475
-
550,000
20/09/2012
$0.1475
Other Management Personnel (Performance Rights)
Nil
Nil
Nil
Nil
Nil
20/09/2022
20/09/2015
20/09/2022
20/09/2022
20/09/2015
20/09/2022
20/09/2022
20/09/2015
20/09/2022
20/09/2022
20/09/2015
20/09/2022
20/09/2022
20/09/2015
20/09/2022
Other
Management
490,000
3,500,000
20/09/2012
$0.1475
Nil
20/09/2022
20/09/2015
20/09/2022
Total
735,000
7,850,000
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 21
For personal use only
Directors’ and Executives’ Equity Holdings Compensation Options and Performance Rights: Movements During the Year
2013 / 2014
Balance
1 July 2013
Granted as
Compensation
Exercised
Lapsed
Net Other
Change
Balance
30 June 2014
No.
No.
No.
No.
No.
No.
Balance
Held
Nominally
No.
Executive Directors (Performance Rights)
P McDonald
900,000
-
(300,000)
Non Executive Directors
None
Executives (Performance Rights)
J Cox
562,500
-
N Pritchard
H Abbey
-
-
M Denney
412,500
B Wang
A Scott
412,500
657,500
750,000
-
-
-
-
-
-
-
-
-
(562,500)
(187,500)
-
(137,500)
(137,500)
(245,000)
(137,500)
Other Management Personnel (Performance Rights)
Other
Management
3,677,500
550,000
(490,000)
(2,025,000)
Total
6,622,500
1,300,000
(735,000)
(3,487,500)
-
-
-
-
-
-
-
-
-
600,000
-
562,500
-
275,000
275,000
275,000
1,712,500
3,700,000
2012 / 2013
Balance
1 July 2012
Granted as
Compensation
Exercised
Lapsed
Net Other
Change
Balance
30 June 2013
No.
No.
No.
No.
No.
No.
Executive Directors (Performance Rights)
P McDonald
-
1,200,000
-
(300,000)
-
900,000
Non Executive Directors
None
Executives (Performance Rights)
J Cox
S
McPherson
M Denney
B Wang
A Scott
-
-
-
-
750,000
750,000
550,000
550,000
245,000
550,000
Other Management Personnel (Performance Rights)
Other
Management
490,000
3,500,000
Total
735,000
7,850,000
Employment Agreements
-
-
-
-
-
-
-
(187,500)
(187,500)
(137,500)
(137,500)
(137,500)
(875,000)
(1,962,500)
-
-
-
-
-
-
-
562,500
562,500
412,500
412,500
657,500
3,115,000
6,622,500
-
-
-
-
-
-
-
-
-
Balance
Held
Nominally
No.
-
-
-
-
-
-
-
-
Value of Lapsed
Options/Rights
$
(44,250)
(82,969)
(37,388)
-
(20,281)
(20,281)
(20,281)
(305,824)
(531,274)
Value of Lapsed
Options/Rights
$
(44,250)
(27,656)
(27,656)
(20,281)
(20,281)
(20,281)
(129,062)
(289,467)
Executives serve under terms and conditions contained in a standard executive employment agreement, that allows for termination
under certain conditions with two to three months’ notice. The agreements include restraints of trade on the employee as well as
confidentiality and intellectual property agreements.
22
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
Auditor Independence and Non Audit Services
A copy of the auditor’s independence declaration in relation to the audit for the financial year is provided with this report.
Non Audit Services
Non audit services have been approved by the Audit Committee and reported to the Board. The Directors are satisfied that the
provision of non audit services is compatible with the general standard of independence for auditors imposed by the Corporations
Act. The nature and scope of each non audit service provided means that auditor independence was not compromised.
Proceedings on Behalf of the Company
No person has applied for leave of a Court to bring proceedings on behalf of the Company or intervene in any proceedings to which
the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
Rounding Off of Amounts
The Company is a company of the kind referred to in ASIC Class Order 98/0100, dated 10 July 1998, and in accordance with that
Class Order amounts in the financial report are rounded off to the nearest thousand dollars.
Signed in accordance with a resolution of Directors made pursuant to section 298(2) of the Corporations Act 2001.
On behalf of the Directors;
David Allman
Chairman
25 August 2014
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 23
For personal use only
24
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 25
For personal use only
26
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
Directors’ Declaration
The Directors of the Company declare that:
The financial statements and notes, as set out on pages 28 to 69 are in accordance with the Corporations Act 2001 including:
(cid:131)
(cid:131)
(cid:131)
(cid:131)
Compliance with Accounting Standards in Australia and the Corporations Regulations 2001;
Providing a true and fair view of the financial position as at 30 June 2014 and of the performance, as represented by the
results of the operations and the cash flows, of the Group for the year ended on that date;
As stated in Note 1, the financial statements also comply with International Financial Reporting Standards; and
That the Directors have been given the declaration required under section 295A of the Corporations Act 2001.
In the Directors' opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
David Allman
Chairman
25 August 2014
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 27
For personal use only
CONTENTS
Consolidated Statement of Profit or Loss
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Additional Securities Exchange Information
29
30
31
32
33
34
70
S
T
L
U
S
E
R
L
A
C
N
A
N
I
F
I
28
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
Consolidated Statement of Profit or Loss
FOR THE YEAR ENDED 30 JUNE 2014
Revenue
Cost of goods sold
Gross profit
Other Income
Warehousing and distribution
Marketing and selling
Administration
Other expenses
Net finance costs
Profit before income tax
Income tax expense
Profit after tax for the year
Earnings Per Share
From operations
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
The accompanying notes form part of these financial statements.
Consolidated
Note
2013 / 2014
($000)
2012 / 2013
($000)
2
3
3
4
19
21
21
137,304
(85,129)
52,175
839
(16,729)
(12,377)
(10,265)
(1,521)
(1,134)
10,988
(2,755)
8,233
119,988
(70,697)
49,291
481
(13,542)
(11,003)
(8,802)
(3,552)
(857)
12,016
(2,932)
9,084
2.77
2.72
3.07
3.00
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 29
For personal use only
Consolidated Statement of Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2014
Profit after tax for the year
Other Comprehensive Income
Items that may be reclassified subsequently to profit or loss
Net changes in fair value of cash flow hedges, net of tax
Exchange differences on translation of foreign operations
Other comprehensive income for the year
Total comprehensive income for the year
Profit Attributable To
Members of the parent
Profit for the year
Total Comprehensive Income Attributable To
Members of the parent
Total comprehensive income for the year
The accompanying notes form part of these financial statements.
Consolidated
Note
2013 / 2014
($000)
2012 / 2013
($000)
8,233
9,084
18
18
(1,629)
(1,488)
(3,117)
5,116
8,233
8,233
5,116
5,116
1,032
5,985
7,017
16,101
9,084
9,084
16,101
16,101
30
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
Consolidated Statement of Financial Position
FOR THE YEAR ENDED 30 JUNE 2014
Consolidated
Note
2013 / 2014
($000)
2012 / 2013
($000)
Current Assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Inventories
Current tax assets
Other current assets
Total current assets
Non Current Assets
Property, plant and equipment
Intangible assets
Deferred tax assets
Total non current assets
Total assets
Current Liabilities
Trade and other payables
Borrowings
Other financial liabilities
Current tax liabilities
Provisions
Total current liabilities
Non Current Liabilities
Borrowings
Deferred tax liabilities
Provisions
Total non current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Retained earnings
Total equity
The accompanying notes form part of these financial statements.
6
7
9
8
4
10
11
12
4
13
14
15
4
16
14
4
16
17
18
19
13,058
19,751
-
34,851
1,721
2,765
72,146
30,469
22,983
815
54,267
126,413
13,309
23,584
709
1,071
1,959
40,632
690
4,834
90
5,614
46,246
80,167
71,485
(11,415)
20,097
80,167
11,187
19,026
1,580
27,876
233
1,159
61,061
34,669
21,233
924
56,826
117,887
11,723
13,913
-
1,493
2,023
29,152
462
5,059
50
5,571
34,723
83,164
71,338
(8,079)
19,905
83,164
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 31
For personal use only
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2014
30 June 2014
Note
Contributed
Equity
($000)
Reserves
($000)
Retained
Earnings
($000)
Total Equity
($000)
Balance at 1 July 2013
71,338
(8,079)
19,905
83,164
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
Transactions With Owners In Their Capacity As
Owners
Shares issued
Employee share based payments
Amounts recognised directly in equity
Statutory transfer to reserves
Dividends paid
17
18
19
-
-
-
147
-
-
-
-
-
(3,117)
(3,117)
(147)
(87)
-
15
-
Total transactions with owners in their capacity as
owners
147
(219)
8,233
-
8,233
-
-
(143)
(15)
(7,883)
(8,041)
8,233
(3,117)
5,116
-
(87)
(143)
-
(7,883)
(8,113)
Balance at 30 June 2014
71,485
(11,415)
20,097
80,167
30 June 2013
Note
Contributed
Equity
($000)
Reserves
($000)
Retained
Earnings
($000)
Total Equity
($000)
Balance at 30 June 2012
70,988
(15,592)
18,781
74,177
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
Transactions With Owners In Their Capacity As
Owners
Shares issued
Employee share based payments
Statutory transfer to reserves
Dividends paid
Total transactions with owners in their capacity as
owners
-
-
-
350
-
-
-
350
-
7,017
7,017
-
87
409
-
496
9,084
-
9,084
-
-
(409)
(7,551)
(7,960)
9,084
7,017
16,101
350
87
-
(7,551)
(7,114)
17
18
18
Balance at 30 June 2013
71,338
(8,079)
19,905
83,164
The accompanying notes form part of these financial statements.
32
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2014
Consolidated
Note
2013 / 2014
($000)
2012 / 2013
($000)
Cash Flow From Operating Activities
Receipts from customers
Payments to suppliers and employees
Interest received
Borrowing costs paid
Income tax payments
Net cash provided by operating activities
23
Cash Flow From Investing Activities
Proceeds from sale of plant and equipment
Proceeds / (payment) from / for disposal / acquisition of business
29(b)
Payment for plant and equipment
Payment for intangible assets
Net cash used by investing activities
Cash Flow From Financing Activities
Proceeds from / (repayment of) borrowings
Proceeds from / (repayment of) principal on finance leases
Dividends paid
Net cash used by financing activities
Net increase / (decrease) in cash held
Cash at beginning of year
Effects of exchange rate changes on items denominated in foreign currencies
Cash at the end of the year
23
The accompanying notes form part of these financial statements.
144,130
(134,711)
6
(1,140)
(4,116)
4,169
56
-
(1,426)
(2,003)
(3,373)
9,899
-
(7,883)
2,016
2,812
11,187
(941)
13,058
127,139
(110,516)
2
(859)
(4,246)
11,520
93
(2,498)
(1,508)
(989)
(4,902)
7,126
-
(7,551)
(425)
6,193
3,121
1,873
11,187
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 33
For personal use only
Notes to the Financial Statements
NOTE 1: Statement of Significant Accounting Policies
The following is a summary of material accounting policies adopted by the Group in the preparation and presentation of the financial
report. The accounting policies have been consistently applied, unless otherwise stated.
(a).
Basis of Preparation of the Financial Report
Gale Pacific Limited is a for profit entity. The financial report of Gale Pacific Limited and controlled entities is a general
purpose financial report that has been prepared in accordance with Australian Accounting Standards, Interpretations and
other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act.
The financial report covers Gale Pacific Limited and controlled entities as a consolidated entity (“the Group”). Gale Pacific
Limited is a company limited by shares, incorporated and domiciled in Australia.
The financial report was authorised for issue by the Directors at the date of the Directors’ Report.
The financial report also complies with the International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB).
The financial report has been prepared under the historical cost convention, as modified by revaluations to fair value for
certain financial instruments as described in the accounting policies.
(b).
Principles of Consolidation
The consolidated financial statements are those of the consolidated entity, comprising the financial statements of the
parent entity and of all entities, which Gale Pacific Limited controlled from time to time during the year and at balance date.
Details of the controlled entities are contained in Note 26.
Control is achieved when the Company:
(cid:131)
(cid:131)
(cid:131)
has power over the investee;
is exposed, or has rights, to variable returns from its involvement with the investee; and
has the ability to use its power to affect its returns.
The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using consistent
accounting policies. Adjustments are made to bring into line any dissimilar accounting policies, which may exist.
All inter company balances and transactions, including any unrealised profits or losses have been eliminated on
consolidation. Subsidiaries are consolidated from the date on which control is established and are derecognised from the
date that control ceases.
(c).
Use of Estimates and Judgements
The preparation of the financial report requires management to make judgements, estimates and assumptions that affect
the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the
revision and future periods if the revision affects both current and future periods.
Information about areas of estimation and critical judgements in applying accounting policies that have the most significant
effect on the amounts recognised in the financial report is included in the following notes:
(cid:131)
(cid:131)
(cid:131)
Note 4 – Income Tax
Note 11 – Property, Plant and Equipment
Note 12 – Intangible Assets
34
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
NOTE 1: Statement of Significant Accounting Policies (continued)
(d).
Foreign Currencies
Functional and Presentation Currency
The financial statements of each Group entity are measured using its functional currency, which is the currency of the
primary economic environment in which that entity operates. The consolidated financial statements are presented in
Australian dollars, as this is the parent entity’s functional and presentation currency.
Transactions and Balances
Transactions in foreign currencies of entities within the Group are translated into functional currency at the rate of
exchange ruling at the date of the transaction.
Foreign currency monetary items that are outstanding at the reporting date (other than monetary items arising under
foreign currency contracts where the exchange rate for that monetary item is fixed in the contract) are translated using the
spot rate at the end of the financial year.
Resulting exchange differences arising on settlement or restatement are recognised as revenues and expenses for the
financial year.
Foreign Currency Translation
The financial statements of foreign operations whose functional currency is different from the Group’s presentation
currency are translated as follows:
(cid:131)
(cid:131)
(cid:131)
Assets and liabilities are translated at year end exchange rates prevailing at that reporting date;
Income and expenses are translated at average exchange rates for the period; and
All resulting exchange differences are recognised as a separate component of equity.
Exchange differences arising on translation of foreign operations are transferred directly to the Group’s foreign currency
translation reserve as a separate component of equity in the statement of financial position.
On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation, or a disposal
involving loss of control over a subsidiary that includes a foreign operation, loss of joint control over a jointly controlled
entity that includes a foreign operation, or loss of significant influence over an associate that includes a foreign operation),
all of the accumulated exchange differences in respect of that operation attributable to the Group are reclassified to profit
or loss.
Goodwill and fair value adjustments on identifiable assets and liabilities acquired arising on the acquisition of a foreign
operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the
end of each reporting period. Exchange differences arising are recognised in equity.
(e).
Segment Reporting
Operating segments are reported based on internal reporting provided to the Managing Director and Chief Executive
Officer who is the Group’s chief operating decision maker.
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 35
For personal use only
NOTE 1: Statement of Significant Accounting Policies (continued)
(f).
Revenue Recognition
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have
passed to the buyer and the amount of revenue can be measured reliably. Risks and rewards of ownership are considered
passed to the buyer at the time of the delivery of goods to the customer.
Where a government grant (including Strategic Investment Plan income (SIP)) is received or receivable relating to research
and development costs that have been expensed, the grant is recognised as revenue. Where a grant is received or
receivable relating to research and development costs that have been deferred, the grant is deducted from the carrying
amount of the deferred costs.
Other revenue is recognised when the right to receive the revenue has been established.
All revenue is stated net of the amount of goods and services tax (GST).
(g).
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand at call, deposits with banks or financial institutions, investments in money
market instruments maturing within less than three months and bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities on the statement of financial position.
For the purposes of the statement of cash flows, cash includes cash on hand and at call, deposits with banks or financial
institutions, investments in money market instruments maturing within less than three months and net of bank overdrafts.
(h).
Inventories
Inventories are measured at the lower of cost or net realisable value. Net realisable value is determined on the basis of
each inventory line’s normal selling pattern. Costs are assigned on a first-in first-out basis and include direct materials,
direct labour and an appropriate proportion of variable and fixed overhead expenses.
(i).
Plant and Equipment
Each class of plant and equipment is carried at cost less, where applicable, any accumulated depreciation.
Plant and Equipment
Plant and equipment is measured on a cost basis.
Depreciation
The depreciable amounts of all fixed assets, including capitalised leased assets, are depreciated on a straight line basis over
their estimated useful lives to the entity commencing from the time the asset is held ready for use. Leasehold
improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of
the improvements. Depreciation and amortisation rates are reviewed annually for appropriateness. When changes are
made, adjustments are reflected in current and future periods only.
The depreciation rates used for each class of assets are:
Class of Fixed Asset
Buildings
Leasehold improvements
Plant and equipment
Motor vehicles
Office equipment
Depreciation Rates
Depreciation Basis
2.25%
Determined by lease term
6.7% - 50.0%
20.0%
20.0% - 50.0%
Straight line
Straight line
Straight line
Straight line
Straight line
36
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
NOTE 1: Statement of Significant Accounting Policies (continued)
(j).
Leases
Leases are classified at their inception as either operating or finance leases based on the economic substance of the
agreement so as to reflect the risks and benefits incidental to ownership.
Finance Leases
Leases of fixed assets, where substantially all the risks and benefits incidental to the ownership of the asset, but not the
legal ownership, are transferred to the entities within the Group are classified as finance leases. Finance leases are
capitalised, recording an asset and a liability equal to the present value of the minimum lease payments, including any
guaranteed residual values. The interest expense is calculated using the interest rate implicit in the lease and is included in
finance costs in the statement of comprehensive income. Leased assets are depreciated on a straight line basis over their
estimated useful lives or over the term of the lease. Lease payments are allocated between the reduction of the lease
liability and the lease interest expense for the period.
Operating Leases
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as
expenses in the periods in which they are incurred. Lease incentives received under operating leases are recognised as a
liability and amortised over the term of the lease.
(k).
Intangibles
Goodwill
Goodwill on consolidation represents the excess of the cost of an acquisition over the fair value of the Group’s share of net
identifiable assets of the acquired entities at the date of acquisition.
Goodwill is not amortised but is tested annually for impairment, or more frequently if events or changes in circumstances
indicate that it might be impaired. Goodwill is carried at cost less accumulated impairment losses.
Any impairment loss for goodwill is recognised directly in profit or loss. An impairment loss recognised for goodwill is not
reversed in subsequent periods.
Patents and Trademarks
Patents and trademarks are valued in the accounts at cost of acquisition and are amortised over the period in which the
benefits are expected to be realised, but not exceeding 20 years.
Application Software
Application software is valued in the accounts at cost and amortised on a straight line basis over its expected useful life but
not exceeding five years.
Research and Development
Expenditure on research is recognised as an expense when incurred. Expenditure on development activities is capitalised
only when it is expected that future benefits will exceed the deferred costs. Capitalised development expenditure is stated
at cost less accumulated amortisation.
Amortisation is calculated using a straight line method to allocate the cost over a period (not exceeding three years), during
which the related benefits are expected to be realised, once commercial production has commenced.
(l).
Impairment of Assets
At each reporting date, the consolidated entity reviews the carrying amounts of its tangible and intangible assets to
determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where
the asset does not generate cashflows that are independent from other assets, the consolidated entity estimates the
recoverable amount of the cash generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows
have not been adjusted. In assessing fair value less costs to sell, recognised valuation methodologies are applied, utilising
current and forecast financial information as appropriate, benchmarked against relevant market data.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is
reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately, unless the relevant asset
is carried at fair value, in which case the impairment loss is treated as a revaluation decrease.
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 37
For personal use only
NOTE 1: Statement of Significant Accounting Policies (continued)
(l).
Impairment of Assets (continued)
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of
its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an
impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value in which case
the reversal of the impairment loss is treated as a revaluation increase.
(m).
Taxes
Current Tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the
consolidated statement of comprehensive income because of items of income or expense that are taxable or deductible in
other years and items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the end of the reporting period.
Deferred Tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the
consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax
liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all
deductible temporary differences to the extent that it is probable that taxable profits will be available against which those
deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary
difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and
liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and
associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets
arising from deductible temporary differences associated with such investments and interests are only recognised to the
extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary
differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it
is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability
is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the
end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that
would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the
carrying amount of its assets and liabilities.
Deferred tax liabilities and assets are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to
settle its current tax assets and liabilities on a net basis.
Current and Deferred Tax for the Year
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other
comprehensive income or directly in equity, in which case the current and deferred tax are also recognised in other
comprehensive income or directly in equity, respectively. Where current tax or deferred tax arises from the initial
accounting for a business combination, the tax effect is included in the accounting for the business combination.
Tax Consolidation
(cid:131)
Relevance of tax consolidation to the Group
The Company and all its wholly-owned Australian resident entities are part of a tax-consolidated group (formed on 1
June 2011), under Australian taxation law. Gale Pacific Limited is the head entity in the tax-consolidated group. The
members of the tax-consolidated group are identified in note 26. A tax funding arrangement and a tax sharing
agreement has been entered into between the entities. As such a notional current and deferred tax calculation for
each entity as if it were a taxpayer in its own right (except that unrealised profits, distributions made and received
and capital gains and losses and similar items arising on transactions within the tax-consolidated group are treated
as having no tax consequences) has been performed. Current tax liabilities and assets and deferred tax assets
arising from unused tax losses and tax credits of the members of the tax-consolidated group are recognised by the
Company (as head entity in the tax consolidated group).
38
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
NOTE 1: Statement of Significant Accounting Policies (continued)
(m).
Taxes (continued)
(cid:131)
Nature of tax funding arrangements and tax sharing agreements
Entities within the tax-consolidated group have entered into a tax funding arrangement and a tax-sharing agreement
with the head entity. Under the terms of the tax funding arrangement, Gale Pacific Limited and each of the other
entities in the tax-consolidated group has agreed to pay a tax equivalent payment to or from the head entity, based
on the current tax liability or current tax asset of the entity.
The tax sharing agreement entered into between members of the tax-consolidated group provides for the
determination of the allocation of income tax liabilities between the entities should the head entity default on its tax
payment obligations or if an entity should leave the tax-consolidated group. The effect of the tax sharing agreement
is that each member’s liability for tax payable by the tax consolidated group is limited to the amount payable to the
head entity under the tax funding arrangement.
(n).
Provisions
A provision is recognised if, as a result of a past event , the Group has a present legal or constructive obligation that can be
estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation.
(o).
Employee Benefits
Provision is made for the Group’s liability for employee entitlements arising from services rendered by employees to
balance date. Employee entitlements expected to be settled within one year together with entitlements arising from wages
and salaries, annual leave and sick leave which will be settled after one year, have been measured at their nominal amount.
Other employee entitlements payable later than one year have been measured at the present value of the estimated future
cash outflows to be made for those entitlements.
Contributions are made by the Group to employee superannuation funds and are charged as expenses when incurred.
Liabilities recognised in respect of long term employee benefits are measured as the present value of the estimated future
cash outflows to be made by the Group in respect of services provided by employees up to reporting date.
Share Based Payments
The Group operates a share performance rights scheme for certain staff and Executives including Executive Directors.
The total amount to be expensed over the vesting period is determined by reference to the fair value of the share options
and performance rights at grant date. The fair value of options and performance rights at grant date is determined using
the method and assumptions disclosed in Note 17, and is recognised as an employee expense over the period during
which the employees become entitled to the option or performance right.
(p).
Financial Instruments
The Group classifies its financial instruments in the following categories:
Non Derivative Financial Instruments
Loans and Receivables
Loans and receivables are measured at fair value at inception and subsequently at amortised cost using the effective
interest rate method less any impairment losses.
Financial Liabilities
Financial liabilities include trade payables, other creditors, loans from third parties, related party balances and loans from or
other amounts due to director related entities. Financial liabilities are recognised at fair value at inception and subsequently
measured at amortised cost, using the effective interest rate method.
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 39
For personal use only
NOTE 1: Statement of Significant Accounting Policies (continued)
(p).
Financial Instruments (continued)
Derivative Financial Instruments
Cash Flow Hedges
Forward foreign currency contracts are classified as cash flow hedges when they hedge exposure to variability in cash
flows of a recognised asset, liability or a highly probable forecasted transaction. When established, a cash flow hedge is
formally documented. This documentation includes identification of the hedging instrument, the hedged item or
transaction, the foreign currency risk being hedged and an assessment of the hedging instrument’s effectiveness in
offsetting the exposure to the hedged item’s cash flows. Cash flow hedges are expected to be highly effective in
offsetting changes in cash flows and are assessed on an ongoing basis to determine effectiveness. The portion of any gain
or loss on a hedging instrument that is an effective hedge is recognised directly in equity. Any ineffective portion is
immediately recognised through profit and loss. Hedge accounting is discontinued when the hedging instrument matures
or is closed out, or the designation as a cash flow hedge is terminated. At that point in time any gain or loss recognised in
equity remains in equity until the hedged transaction occurs when it is transferred to profit and loss in the same period that
the hedged item affects profit and loss, or is included as a basis adjustment to a non financial hedged item.
Financial Instruments at Fair Value Through Profit and Loss
Forward foreign currency contracts that do not qualify for hedge accounting are measured at their fair value with any
increment or decrement in fair value recognised in profit and loss.
(q).
Rounding Amounts
The Company is of a kind referred to in ASIC Class Order CO 98/0100 and in accordance with that Class Order, amounts in
the financial statements have been rounded off to the nearest thousand dollars, or in certain cases, to the nearest dollar.
(r).
Comparatives
Where necessary, comparative information has been reclassified and repositioned for consistency with current year
disclosures.
(s).
New Accounting Standards and Interpretations
Standards and Interpretations affecting amounts reported in the current period (and/or prior periods)
In the current year, the Group has applied a number of new and revised AASBs issued by the Australian Accounting
Standards Board (AASB) that are mandatorily effective for an accounting period that begins on or after 1 January 2013.
AASB 2011-4
‘Amendments to
Australian Accounting
Standards to Remove
Individual Key
Management Personnel
Disclosure Requirements’
AASB 2012-2
‘Amendments to
Australian Accounting
Standards – Disclosures –
Offsetting Financial
Assets and Financial
Liabilities’
This standard removes the individual key management personnel disclosure requirements in
AASB 124 ‘Related Party Disclosures’.
In the current year the individual key management personnel disclosure previously required by
AASB 124 is now disclosed in the remuneration report due to an amendment to Corporations
Regulations 2001 issued in June 2013.
The Group has applied the amendments to AASB 7 ‘Disclosures – Offsetting Financial Assets
and Financial Liabilities’ for the first time in the current year. The amendments to AASB 7
require entities to disclose information about rights of offset and related arrangements (such
as collateral posting requirements) for financial instruments under an enforceable master
netting agreement or similar arrangement.
The amendments have been applied retrospectively. As the Group does not have any
offsetting arrangements in place, the application of the amendments does not have any
material impact on the consolidated financial statements.
40
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
NOTE 1: Statement of Significant Accounting Policies (continued)
(s)
New Accounting Standards and Interpretations (continued)
AASB 10 ‘Consolidated
Financial Statements’ and
AASB 2011-7
‘Amendments to
Australian Accounting
Standards arising from the
consolidation and Joint
Arrangements standards’
AASB 10 replaces the parts of AASB 127 ‘Consolidated and Separate Financial Statements’
that deal with consolidated financial statements and Interpretation 112 ‘Consolidation –
Special Purpose Entities’. AASB 10 changes the definition of control such that an investor
controls an investee when a) it has power over an investee, b) it is exposed, or has rights, to
variable returns from its involvement with the investee, and c) has the ability to use its power
to affect its returns. All three of these criteria must be met for an investor to have control over
an investee. Previously, control was defined as the power to govern the financial and
operating policies of an entity so as to obtain benefits from its activities. As all the subsidiaries
are 100% wholly owned there is no change to the assessment of control over the
subsidiaries.
AASB 12 ‘Disclosure of
Interests in Other Entities’
and AASB 2011-7
‘Amendments to
Australian Accounting
Standards arising from the
consolidation and Joint
Arrangements standards’
AASB 13 ‘Fair Value
Measurement’ and AASB
2011-8 ‘Amendments to
Australian Accounting
Standards arising from
AASB 13’
AASB 12 is a new disclosure standard and is applicable to entities that have interests in
subsidiaries, joint arrangements, associates and/or unconsolidated structured entities. There
are no changes to disclosures for the Group.
The Group has applied AASB 13 for the first time in the current year. AASB 13 establishes a
single source of guidance for fair value measurements and disclosures about fair value
measurements. The scope of AASB 13 is broad; the fair value measurement requirements of
AASB 13 apply to both financial instrument items and non-financial instrument items for which
other AASBs require or permit fair value measurements and disclosures about fair value
measurements, except for share based payment transactions that are within the scope of
AASB 2 ‘Share-based Payment’, leasing transactions that are within the scope of AASB 117
‘Leases’, and measurements that have some similarities to fair value but are not fair value
(e.g. net realisable value for the purposes of measuring inventories or value in use for
impairment assessment purposes).
AASB 13 defines fair value as the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction in the principal (or most advantageous) market at
the measurement date under current market conditions. Fair value under AASB 13 is an exit
price regardless of whether that price is directly observable or estimated using another
valuation technique. Also, AASB 13 includes extensive disclosure requirements.
AASB 13 requires prospective application from 1 July 2013. In addition, specific transitional
provisions were given to entities such that they need not apply the disclosure requirements
set out in the Standard in comparative information provided for periods before the initial
application of the Standard. In accordance with these transitional provisions, the Group has not
made any new disclosures required by AASB 13 for the 2013 comparative period. Other than
the additional disclosures, the application of AASB 13 does not have any material impact on
the amounts recognised in the consolidated financial statements.
AASB 119 ‘Employee
Benefits’ (2011) and AASB
2011-10 ‘Amendments to
Australian Accounting
Standards arising from
AASB 119 (2011)’
In the current year, the Group has applied AASB 119 (as revised in 2011) ‘Employee Benefits’
and the related consequential amendments for the first time.
AASB 119 (as revised in 2011) changes the accounting for defined benefit plans and
termination benefits. The most significant change relates to the accounting for changes in
defined benefit obligations and plan assets. The amendments require the recognition of
changes in defined benefit obligations and in the fair value of plan assets when they occur,
and hence eliminate the ‘corridor approach’ permitted under the previous version of AASB 119
and accelerate the recognition of past service costs.
As the Group does not have any defined benefit plans in place, the application of the
amendments does not have any material impact on the consolidated financial statements.
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 41
For personal use only
NOTE 1: Statement of Significant Accounting Policies (continued)
(s)
New Accounting Standards and Interpretations (continued)
Standards and Interpretations in issue not yet adopted
At the date of authorisation of the financial statements, the Standards and Interpretations listed below were in issue but not
yet effective.
Standard/Interpretation
Effective for annual
reporting periods beginning
on or after
Expected to be initially
applied in the financial
year ending
AASB 9 ‘Financial Instruments’, and the relevant amending
standards
1 January 2018
30 June 2019
AASB 1031 ‘Materiality’ (2013)
1 January 2014
30 June 2015
AASB 2012-3
‘Amendments to Australian Accounting
Standards Offsetting Financial Assets and Financial
Liabilities’
1 January 2014
30 June 2015
AASB 2013-3 ‘Amendments to AASB 136 – Recoverable
Amount Disclosures for Non-Financial Assets’
1 January 2014
30 June 2015
AASB 2013-4
‘Amendments to Australian Accounting
Standards – Novation of Derivatives and Continuation of
Hedge Accounting’
1 January 2014
30 June 2015
AASB 2013-5
Standards – Investment Entities’
‘Amendments to Australian Accounting
1 January 2014
30 June 2015
AASB 2013-9
‘Amendments to Australian Accounting
Standards – Conceptual Framework, Materiality and
Financial Instruments’
1 January 2014
30 June 2015
AASB 2014-1
Standards’
‘Amendments to Australian Accounting
1 July 2014
30 June 2015
• Part A: ‘Annual Improvements 2010–2012 and 2011–
2013 Cycles’
• Part B: ‘Defined Benefit Plans: Employee Contributions
(Amendments to AASB 119)’
• Part C: ‘Materiality’
AASB 2014-1
Standards’ – Part E: ‘Financial Instruments’
‘Amendments to Australian Accounting
1 January 2016
30 June 2017
AASB 14 ‘Regulatory Deferral Accounts’
1 January 2016
30 June 2017
AASB 2014-4
‘Amendments to Australian Accounting
Standards’ – Calrification of Acceptable Methods of
Depreciation and Amortisation
1 January 2016
30 June 2017
At the date of authorisation of the financial statements, the following IASB Standards and IFRIC Interpretations were also in
issue but not yet effective, although Australian equivalent Standards and Interpretations have not yet been issued.
IFRS 15 ‘Revenue from Contracts with Customers’
1 January 2017
30 June 2018
42
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
NOTE 1: Statement of Significant Accounting Policies (continued)
(t).
Business Combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business
combination is measured at fair value which is calculated as the sum of the acquisition-date fair values of assets transferred
to the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity instruments issued by
the Group in exchange for control of the acquiree. Acquisition related costs are recognised in profit or loss as incurred. At
the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value at the
acquisition date, except that:
(cid:131)
(cid:131)
(cid:131)
deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised
and measured in accordance with AASB 112 ‘Income Taxes’ and AASB 119 ‘Employee Benefits’ respectively;
liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based
payment arrangements of the Group entered into to replace share-based payment arrangements of the acquiree
are measured in accordance with AASB 2 ‘Share-based Payments’ at the acquisition date; and
assets (or disposal groups) that are classified as held for sale in accordance with AASB 5 ‘Non-current Assets Held
for Sale and Discontinued Operations’ are measured in accordance with that Standard.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling
interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the
net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment,
the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the
consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer's
previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase
gain.
Where the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a
contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value. Changes
in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted
retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that
arise from additional information obtained during the ‘measurement period’ (which cannot exceed one year from the
acquisition date) about facts and circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value of contingent consideration that do not qualify as measurement
period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified
as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity.
Contingent consideration that is classified as an asset or liability is remeasured at subsequent reporting dates in accordance
with AASB 139 ‘Financial Instruments’, or AASB 137 ‘Provisions, Contingent Liabilities and Contingent Assets’, as
appropriate, with the corresponding gain or loss being recognised in profit or loss.
Where a business combination is achieved in stages, the Group’s previously held equity interest in the acquiree is
remeasured to fair value at the acquisition date (i.e. the date when the Group attains control) and the resulting gain or loss,
if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have
previously been recognised in other comprehensive income are reclassified to profit or loss where such treatment would
be appropriate if that interest were disposed of.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those
provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities are
recognised to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if
known, would have affected the amounts recognised as of that date.
NOTE 2: Revenue
Consolidated
Operating Activities
Sale of goods
Total revenue
2013 / 2014
($000)
2012 / 2013
($000)
137,304
137,304
119,988
119,988
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 43
For personal use only
NOTE 3: Profit
Profit before income tax expense has been determined after charging / (crediting):
Consolidated
Other Income
Other revenue
Net foreign exchange gains
Total other income
Changes in inventories of finished goods and work in progress and raw materials and consumables
used
Employee benefits
Net Finance Costs
Finance income – other parties
Finance expense – other parties
Net finance costs
Depreciation of Non Current Assets
Amortisation of Non Current Assets
Total depreciation and amortisation
Increase / (decrease) in provision for obsolete inventory
Bad and Doubtful Debts
Bad debts written off – trade debtors
Movement in provisions for doubtful debts – trade debtors
Net foreign exchange losses
Operating lease rental expense
Share based payment expense
The auditor of the parent entity is Deloitte Touche Tohmatsu
Remuneration of the Auditors of the Parent Entity For
Auditing the financial report
Other assurance services
Total remuneration of the auditors of the parent entity
The auditors of the overseas controlled entities are overseas affiliates of
Deloitte Touche Tohmatsu
Remuneration of Other Auditors of Controlled Entities For
Auditing the financial report
Total remuneration of other auditors
Total remuneration of auditors
2013 / 2014
($000)
2012 / 2013
($000)
512
327
839
481
-
481
58,840
51,433
28,242
23,814
(6)
1,140
1,134
5,156
289
5,445
(461)
103
(302)
-
2,929
(87)
175
20
195
50
50
225
(2)
859
857
5,096
67
5,163
289
54
(49)
376
2,704
87
175
-
175
50
50
225
44
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
NOTE 4: Income Tax
(a).
The Components of Tax Expense
Current tax
Deferred tax
Total income tax expense
Disclosed in the financial statements as
Income tax expense from continuing operations
Total
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
2,271
484
2,755
2,755
2,755
3,684
(752)
2,932
2,932
2,932
(b).
The Prima Facie Income Tax Payable on Profit is Reconciled to the Income Tax Expense as Follows
Prima facie tax payable on profit before income tax at 30%
Add tax effect of:
Tax rate differentials in foreign countries
Other non allowable / (non assessable) items
Total
Less tax effect of:
Over provision for income tax in the prior year
Income tax expense attributed to profit from continuing operations
Total income tax expense
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
3,296
3,605
(844)
413
2,865
(110)
2,755
2,755
(579)
(32)
2,994
(62)
2,932
2,932
(c).
Income Tax Recognised Directly in Equity
The following current and deferred tax amounts were (credited) / debited directly to equity during the period.
Deferred Tax
Cash flow hedges
Total
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
(659)
(659)
459
459
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 45
For personal use only
NOTE 4: Income Tax (continued)
(d).
Current Tax
Current tax asset
Current tax liability
Total
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
1,721
(1,071)
650
233
(1,493)
(1,260)
(e). Movement in Net Carrying Amount
Movement in the current tax net carrying amount between the beginning and the end of the year.
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
(1,260)
(2,271)
4,116
65
650
(1,561)
(3,684)
4,246
(261)
(1,260)
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
(84)
(4,443)
2
164
(32)
692
(700)
382
(4,019)
815
(4,834)
(4,019)
203
(4,548)
14
181
440
521
(660)
(286)
(4,135)
924
(5,059)
(4,135)
Balance at the beginning of the year
Current year tax expense
Income tax payments
Net foreign currency movements arising from foreign operations
Carrying amount at the end of the year
(f).
Deferred Tax
Deferred Tax Assets / (Liabilities) Arise from the Following
Property, plant and equipment
Foreign exchange
Doubtful debts
Other financial liabilities
Provisions
Employee benefits
Capitalised costs
Other
Net deferred tax liability
Represented By
Deferred tax asset
Deferred tax liability
Total
46
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
NOTE 4: Income Tax (continued)
(g).
Unrecognised Deferred Tax Assets
The following deferred tax assets have not been brought to account as it is not probable that these can be recovered.
Tax losses – income
Tax losses – capital
Total
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
1,910
33,403
35,313
1,637
33,403
35,040
NOTE 5: Operating Segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Chief Executive
Officer in assessing performance and determining the allocation of resources.
The Group’s four operating segments are identified by geographic location and identity of the service line manager. Discrete
financial information about each of these segments is reported on a monthly basis.
Revenue, result, depreciation and amortisation, significant items, assets and liabilities for the Group’s four operating segments plus
discontinued operations are set out in the tables below.
Australasia
Manufacturing and distribution facilities are located in Australia, and distribution facilities are located in New Zealand. Sales offices
are located in all states in Australia and in New Zealand.
China and Rest of the World Export Sales
Manufacturing facilities are located in Beilun, China which supply to the Group’s sales and marketing operations throughout the
world.
Americas
Sales offices are located in Florida and custom blind assembly and distribution facilities are located in California which service the
North American region.
Middle East
A sales office and distribution facility is located in the United Arab Emirates to service this market.
Business Segment
The Group operates predominantly in one business segment, being branded shading, screening and home improvement products.
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 47
For personal use only
NOTE 5: Operating Segments (continued)
Segment Information Reporting – Geographical Segments
30 June 2014
Australasia
China & ROW
Export Sales
Americas
Middle East
Unallocated /
Elimination
Total Group
Revenue outside the economic
entity
Inter segment revenue
Total revenue
Segment EBITDA
Depreciation and amortisation
Segment EBIT
Net finance expense
Profit before income tax
Income tax expense
Profit for the year
Segment assets
Segment liabilities
($000)
79,931
2,103
82,034
1,721
(1,051)
670
($000)
9,057
41,708
50,765
9,743
(3,874)
5,869
($000)
36,098
(125)
35,973
3,272
(521)
2,751
($000)
12,218
9
12,227
2,749
(1)
2,748
($000)
-
(43,695)
(43,695)
82
-
82
62,925
35,023
35,250
7,176
21,719
3,606
7,168
549
(649)
(108)
($000)
137,304
-
137,304
17,567
(5,445)
12,122
(1,134)
10,988
(2,755)
8,233
126,413
46,246
30 June 2013
Australasia
China & ROW
Export Sales
Americas
Middle East
Unallocated /
Elimination
Total Group
Revenue outside the economic
entity
Inter segment revenue
Total revenue
Segment EBITDA
Depreciation and amortisation
Segment EBIT
Net finance expense
Profit before income tax
Income tax expense
Profit for the year
Segment assets
Segment liabilities
($000)
76,862
1,844
78,706
6,239
(890)
5,349
($000)
7,555
28,641
36,196
7,642
(3,959)
3,683
($000)
25,873
(102)
25,771
2,121
(311)
1,810
($000)
9,698
31
9,729
1,916
(3)
1,913
($000)
-
(30,414)
(30,414)
118
-
118
53,847
26,542
40,163
4,781
18,630
2,963
5,978
525
(731)
(88)
($000)
119,988
-
119,988
18,036
(5,163)
12,873
(857)
12,016
(2,932)
9,084
117,887
34,723
Notes:
(cid:131)
(cid:131)
(cid:131)
(cid:131)
All inter segment pricing is on a commercial basis.
Australasia result excludes finance costs, interest revenue and income tax expense.
Australasia includes foreign exchange hedge and Australian Corporate costs.
Revenue from one customer in the Australasian region represents $49,280,000 (2013 : $44,985,000) of the Groups total
revenues.
48
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
NOTE 6: Cash And Cash Equivalents
Cash on hand
Cash at bank
Cash on deposit
Total
NOTE 7: Trade And Other Receivables
Current
Trade debtors
Less provision for doubtful debts
Total
Other receivables
Total
Movement in the provision for doubtful debts were:
Balance at the beginning of the year
Charge for the year
Amounts written off
Net foreign currency movements arising from foreign operations
Balance at the end of the year
Trade Receivables
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
12
12,872
174
13,058
12
10,627
548
11,187
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
19,384
(64)
19,320
431
19,751
(366)
237
66
(1)
(64)
18,959
(366)
18,593
433
19,026
(403)
3
48
(14)
(366)
The average credit period on sales of goods varies by geographic region and market from 0 to 90 days. No interest is charged on
trade receivables.
Before accepting any new customer, the Group uses internal resources and criteria to assess the potential customer’s credit quality
and defines credit limits by customer.
NOTE 8: Inventories
Current
Raw materials at cost
Work in progress at cost
Finished goods at cost
Less provision for obsolescence – finished goods
Total
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
6,943
1,604
27,032
(728)
34,851
6,360
1,994
20,120
(598)
27,876
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 49
For personal use only
NOTE 9: Other Financial Assets
Current
Foreign currency forward contracts
Total
NOTE 10: Other Current Assets
Current
Prepayments
Total
NOTE 11: Property, Plant And Equipment
Buildings
At cost
Less accumulated depreciation
Total
Plant and Equipment
At cost
Less accumulated depreciation
Total
Leasehold Improvements
At cost
Less accumulated depreciation
Total
Motor Vehicles
At cost
Less accumulated depreciation
Total
Office Equipment
At cost
Less accumulated depreciation
Total
Capital Work in Progress
Total property, plant and equipment
50
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
-
-
1,580
1,580
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
2,765
2,765
1,159
1,159
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
9,489
(2,070)
7,419
65,645
(43,868)
21,777
561
(439)
122
230
(137)
93
5,613
(4,717)
896
162
9,571
(1,845)
7,726
65,977
(40,239)
25,738
480
(413)
67
350
(212)
138
5,164
(4,348)
816
184
30,469
34,669
For personal use only
NOTE 11: Property, Plant And Equipment (continued)
Movements in Carrying Amounts
Movement in the carrying amounts for each class of property, plant and equipment between
the beginning and the end of the year.
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
Buildings
Balance at the beginning of the year
Reclassifications
Additions / (transfers)
Depreciation expense
Net foreign currency movements arising from foreign operations
Carrying amount at the end of the year
Plant and Equipment
Balance at the beginning of the year
Reclassifications
Additions / (transfers)
Disposals
Acquisitions through business combinations
Depreciation expense
Net foreign currency movements arising from foreign operations
Carrying amount at the end of the year
Leasehold Improvements
Balance at the beginning of the year
Additions / (transfers)
Depreciation expense
Net foreign currency movements arising from foreign operations
Carrying amount at the end of the year
Motor Vehicles
Balance at the beginning of the year
Reclassifications
Additions / (transfers)
Disposals
Depreciation expense
Net foreign currency movements arising from foreign operations
Carrying amount at the end of the year
Office Equipment
Balance at the beginning of the year
Reclassifications
Additions / (transfers)
Disposals
Depreciation expense
Net foreign currency movements arising from foreign operations
Carrying amount at the end of the year
7,726
-
54
(260)
(101)
7,419
25,738
(41)
871
(96)
-
(4,520)
(173)
21,779
67
85
(30)
-
122
138
20
15
(47)
(31)
(2)
93
816
21
422
(3)
(315)
(45)
896
7,208
(21)
-
(228)
767
7,726
27,028
16
1,097
(158)
35
(4,558)
2,278
25,738
90
12
(34)
(1)
67
160
2
72
(50)
(47)
1
138
826
3
204
(9)
(229)
21
816
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 51
For personal use only
NOTE 12: Intangible Assets
Goodwill at cost
Less accumulated impairment
Total
Patents, trademarks and licenses at cost
Less accumulated amortisation
Total
Application software at cost
Less accumulated amortisation
Total
Research and development
Less accumulated amortisation
Total
Total intangible assets
Movements in Carrying Amounts
Movement in the carrying amounts for each class of intangible assets between the
beginning and the end of the year
Goodwill
Balance at the beginning of the year
Acquisition through business combinations
Net foreign currency movements arising from foreign operations
Carrying amount at the end of the year
Patents, Trademarks and Licences
Balance at the beginning of the year
Additions / (transfers)
Disposals
Amortisation expense
Net foreign currency movements arising from foreign operations
Carrying amount at the end of the year
Application Software
Balance at the beginning of the year
Additions
Amortisation expense
Net foreign currency movements arising from foreign operations
Carrying amount at the end of the year
Goodwill
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
21,032
(1,054)
19,978
1,449
(1,099)
350
2,910
(255)
2,655
4,865
(4,865)
-
22,983
19,933
85
(40)
19,978
333
60
(10)
(34)
1
350
967
1,943
(255)
-
2,655
20,987
(1,054)
19,933
1,404
(1,071)
333
2,293
(1,326)
967
4,865
(4,865)
-
21,233
16,667
3,095
171
19,933
351
32
-
(51)
1
333
26
957
(16)
-
967
The recoverable amount of the cash generating units (CGU) have been determined based on a fair value less costs of disposal
calculation using the EBITDA multiples method. This has been calculated based on historical, current and future maintainable
earnings. FY15 budget, as approved by the Board of Directors, forecasts revenue growth for the period within the range of 3% to
5% depending on the demographic, economic, trading conditions and growth potential, of the CGU. Costs to dispose have been
estimated at 2% of fair value, based on similar transactions in the market. In prior periods, a value in use model was used to
determine the recoverable amount. This was done using a discount rate applied to the cash flow projections of 9.73% and a
terminal value representing the growth rate applied to extrapolate the cash flows beyond the five year forecast period. These
growth rates were based on the Board of Directors expectations, industry knowledge and other features specific to each CGU. The
five year cash flow projections used for future maintainable earnings are based on the 2014 year budget (2013: based on 2013
budget) and an ongoing growth rate of 3% to 5% which is considered reasonable in light of past performance and future operating
plans and business strategies.
The values of the key assumptions reflect past experiences/external sources of information.
The Group has moved to the FVLCD method instead of VIU method as it more accurately reflects the more relevant and reliable
information.
52
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
NOTE 12: Intangible Assets (continued)
Goodwill (continued)
Goodwill by CGU
Australia
USA – (2013 / 2014 US$2,077,000: 2012 / 2013 US$2,077,000:)
China
Total
Sensitivity Analysis
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
17,455
2,176
347
19,978
17,370
2,216
347
19,933
Any reasonable change in the key assumptions of the fair value less costs of disposal and value in use calculations would not result
in an impairment.
NOTE 13: Trade And Other Payables
Current
Trade payables
Sundry payables and accruals
Total
NOTE 14: Borrowings
Current
Secured liabilities: 1
Bank loans
Other loans
Commercial bills
Total
Non Current
Unsecured liabilities:
Bank loans
Other loans
Total
Total
Disclosed in the Consolidated Statement of Financial Position As
Current borrowings
Non current borrowings
1 Secured by general security interests over certain assets of the Group.
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
8,086
5,223
13,309
7,740
3,983
11,723
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
1,757
-
20,550
22,307
692
585
1,277
-
263
13,650
13,913
-
462
462
24,274
14,375
23,584
690
13,913
462
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 53
For personal use only
NOTE 15: Other Financial Liabilities
Derivatives carried at fair value:
Current
Foreign currency forward contracts
Total
NOTE 16: Provisions
Current
Employee benefits
Warranty claims
Non Current
Employee benefits
Total
Disclosed in the Consolidated Statement of Financial Position As
Current provisions
Non current provisions
(a) Aggregate employee benefits liability
(b) Number of employees at year end
Movements in Carrying Amounts
Movement in the carrying amounts for the following classes of provision between the beginning and the
end of the year
Restructuring and Termination Costs
Balance at the beginning of the year
Provisions recognised
Payments made
Reductions resulting from release of provision no longer required
Net foreign currency movements arising from foreign operations
Carrying amount at the end of the year
Warranty claims
Balance at the beginning of the year
Provisions recognised
Provisions written back
Payments made
Carrying amount at the end of the year
54
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
709
709
-
-
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
1,909
50
90
2,049
1,959
90
1,999
647
-
-
-
-
-
-
228
169
(347)
-
50
1,795
228
50
2,073
2,023
50
1,845
606
501
20
(75)
(461)
15
-
108
125
(7)
2
228
For personal use only
NOTE 17: Contributed Equity
Paid Up Capital
Fully paid ordinary shares
Movement In Share Capital
Shares issued at the beginning of the financial year
Shares issued during the year
Total
(a). Movement in Share Capital
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
71,485
71,338
Consolidated
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
2013 / 2014
(No. of Shares)
2012 / 2013
(No. of Shares)
71,338
147
71,485
70,988
350
71,338
296,739,396
295,441,658
735,000
1,297,738
297,474,396
296,739,396
On 5 July 2013 the Company issued 735,000 ordinary shares under the terms of the Performance Rights Plan.
On 30 November 2012 the Company issued 1,297,738 ordinary shares as part of the consideration for the acquisition of
Highgrove Glass Solutions.
(b).
Rights of Each Type of Share
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of
shares held. At shareholders meetings each ordinary share is entitled to one vote when a poll is called.
(c).
Capital Management
When managing capital, management’s objective is to ensure the consolidated entity continues as a going concern as well
as to maintain optimal returns to shareholders and benefits for other stakeholders. This is achieved through monitoring of
historical and forecast performance and cashflows.
During the year the Company paid dividends of $7,883,072 (2013 : $7,550,633)
(d).
Share Based Payments
The Group maintains a performance rights scheme for certain staff and executives, including executive directors, as
approved by shareholders at an annual general meeting. These schemes are designed to reward key personnel when the
Group meets performance hurdles relating to:
(cid:131)
(cid:131)
Improvement in earnings per share; and
Improvement in return to shareholders.
The number of unissued ordinary shares under the performance rights scheme at the reporting date is 3,100,000. Each
performance right entitles the holder one (1) ordinary share in Gale Pacific Limited when exercised and is subject to the
satisfying of relevant performance hurdles based on improvements in the Company’s diluted earnings per share.
Options and performance rights issued to executives during the year were issued in accordance with the Group’s
remuneration policy which:
(cid:131)
(cid:131)
(cid:131)
Reward executives for Group and individual performance;
Align the interests of the executives with those of the shareholders; and
Ensure that total remuneration is competitive by market standards.
The following share based payment arrangements were in existence during the current and comparative reporting periods.
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 55
For personal use only
NOTE 17: Contributed Equity (continued)
(d).
Share Based Payments (continued)
Performance Rights
Grant Date
Expiry Date
Exercise
Price
Balance
Start of Year
No.
Granted
During Year
No.
Exercised
During Year
No.
Lapsed
During Year
No.
Balance End
of Year
No.
Exercisable
End of Year
No.
Consolidated and Parent Entity - 2014
18 Aug 2010
30 Jun 2020
20 Sep 2012
20 Sep 2022
26 Nov 2012
20 Sep 2022
3 Oct 2013
3 Oct 2023
Total
Consolidated and Parent Entity - 2013
18 Aug 2010
30 Jun 2020
20 Sep 2012
20 Sep 2022
26 Nov 2012
20 Sep 2022
Total
Nil
Nil
Nil
Nil
Nil
Nil
Nil
735,000
4,987,500
900,000
-
-
-
-
1,300,000
(735,000)
-
-
-
-
-
(2,862,500)
2,125,000
(300,000)
600,000
(325,000)
975,000
6,622,500
1,300,000
(735,000)
(3,487,500)
3,700,000
-
-
-
-
-
735,000
-
-
-
6,650,000
1,200,000
735,000
7,850,000
-
-
-
-
-
735,000
735,000
(1,662,500)
4,987,500
(300,000)
900,000
-
-
(1,962,500)
6,622,500
735,000
Performance rights have been valued using the binomial option pricing model.
Grant Date
3 October 2013
Grant Date
26 November 2012
Grant Date
20 September 2012
$0.1994
Nil
3.0 years
3.0 years
2.9 years
11.02%
$0.1475
Nil
3.0 years
3.0 years
3.0 years
13.13%
$0.1475
Nil
3.0 years
3.0 years
3.0 years
13.13%
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
(12,780)
(11,292)
486
(508)
1,387
(11,415)
720
1,121
1,372
(8,079)
Performance Rights Valuation Assumptions
Value of rights to acquire one share
Exercise price
Expected Life
Tranche 1
Tranche 2
Tranche 3
Dividend yield
NOTE 18: Reserves
Foreign currency translation reserve
Share based payments reserve
Hedging reserve
Enterprise reserve fund
Total
56
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
NOTE 18: Reserves (continued)
(a).
Foreign Currency Translation Reserve
Balance at the beginning of the year
Translation of foreign controlled entities for the year
Movement arising from the reclassification of non current related party monetary items to net
investments in foreign operations
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
(11,292)
(1,010)
(478)
(17,277)
7,372
(1,387)
Balance at the end of the year
(12,780)
(11,292)
Exchange differences relating to foreign currency monetary items forming part of the net investment in a foreign operation
and the translation of foreign controlled entities are brought to account by entries made directly to the foreign currency
translation reserve, as described in Notes 1(d) and 1(e).
(b).
Employee Share Based Payments Reserve
Balance at the beginning of the year
Share based expense
Transfer to share capital
Balance at the end of the year
(c).
Hedging Reserve
Balance at the beginning of the year
Forward exchange contracts
Income tax on net changes recognised
Balance at the end of the year
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
720
(87)
(147)
486
633
87
-
720
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
1,121
(2,288)
659
(508)
89
1,491
(459)
1,121
The hedging reserve represents hedging gains and losses recognised on the effective portion of cash flow hedges. The
cumulative gain or loss on the hedge is recognised as a profit or loss when the hedging instrument impacts the profit or
loss, or is included as a basis adjustment to a non financial hedged item, consistent with the applicable accounting policy.
(d).
Enterprise Reserve Fund (Gale Pacific Special Textiles (Ningbo) Limited) and Gale Pacific Trading (Ningbo) Limited
Balance at the beginning of the year
Statutory transfers from retained earnings
Balance at the end of the year
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
1,372
15
1,387
963
409
1,372
Gale Pacific Special Textiles (Ningbo) Limited (“GPST”) and Gale Pacific Trading (Ningbo) Limited are required by Chinese
Company Law to maintain this reserve in its accounts. This reserve is unavailable for distribution to shareholders but can
be used by GPST to expand the business, make up losses or increase the registered capital. They are required to allocate
10% of its annual profit after tax to this reserve until it reaches 50% of their registered capital.
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 57
For personal use only
NOTE 19: Retained Earnings
Balance at the beginning of the year
Net profit attributable to members of the parent entity
Dividends paid
Amounts recognised directly in equity
Transfers to reserves
Balance at the end of the year
NOTE 20: Dividends
The following dividends were paid during the year.
Note
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
19,905
8,233
(7,883)
(143)
(15)
20,097
18,781
9,084
(7,551)
-
(409)
19,905
Final Dividend for the Financial Year 2012 / 2013
Franked to 80% at a 30% tax rate (date of payment 4 October 2013)
Interim Dividend for the Financial Year 2013 / 2014
Franked to 75% at a 30% tax rate (date of payment 10 April 2014)
Total
Final Dividend for the Financial Year 2011 / 2012
Fully franked at a 30% tax rate (date of payment 3 October 2012)
Interim Dividend for the Financial Year 2012 / 2013
Fully franked at a 30% tax rate (date of payment 25 march 2013)
Total
Fully Paid Ordinary Shares
2013 / 2014
Cents Per Share
Consolidated
2013 / 2014
($000)
1.35
1.30
2.65
4,016
3,867
7,883
Fully Paid Ordinary Shares
2012 / 2013
Cents Per Share
Consolidated
2012 / 2013
($000)
1.25
1.30
2.55
3,693
3,858
7,551
On 25 August 2014, the Directors declared an unfranked dividend of 1.35 cents per share to the holders of fully paid ordinary
shares in respect of the year ended 30 June 2014, to be paid to shareholders on 1 December 2014. This dividend has not been
included as a liability in these financial statements. The total estimated dividend to be paid is $4.06 million.
Adjusted franking account balance
Dividend Franking Account
2013 / 2014
($000)
Consolidated
2012 / 2013
($000)
579
850
Balance of franking account on a tax paid basis at financial year end adjusted for franking credits arising from payment of provision
for income tax.
58
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
NOTE 21: Earnings Per Share
Basic Earnings Per Share
From continuing operations
Total basic earnings per share
Diluted Earnings Per Share
From continuing operations
Total diluted earnings per share
Earnings Per Share
The earnings and weighted average number of ordinary shares used in the calculation of basic and diluted
earnings per share are as follows:
Profit after tax for the year
Earnings Used in the Calculation of Basic EPS
Adjustments to exclude profit for the period from discontinued operations
Earnings used in the calculation of basic and diluted EPS from continuing operations
Consolidated
2013 / 2014
(Cents Per Share)
2012 / 2013
(Cents Per Share)
2.77
2.77
2.72
2.72
3.07
3.07
3.00
3.00
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
8,233
9,084
-
8,233
-
9,084
Consolidated
2013 / 2014
(000)
2012 / 2013
(000)
Weighted average number of ordinary shares for the purposes of basic earnings per share
297,464
296,195
Weighted average number of shares deemed to be issued for no consideration in respect of:
Performance rights
Weighted average number of ordinary shares for the purposes of diluted earnings per share
5,600
303,064
6,602
302,797
NOTE 22: Capital and Leasing Commitments
(a).
Operating Lease Commitments
Non cancellable operating leases contracted for but not capitalised in the accounts
Payable
Not longer than one year
Longer than one year and not longer than five years
Total
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
2,476
1,395
3,871
2,332
1,363
3,695
The above lease commitments relate to property leases. The Company has no rights to purchase the properties at the end
of the lease term.
(b).
Capital Expenditure Commitments
Payable
Not longer than one year
Total
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
456
456
-
-
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 59
For personal use only
NOTE 23: Cash Flow Information
(a).
Reconciliation of Cash
Cash at the end of the financial year as shown in the statement of cash flows is reconciled to
the related items in the statement of financial position as follows:
Cash on hand
Cash at bank
Cash on deposit
Total
(b).
Reconciliation of Profit for the Period to Net Cash Provided by Operating Activities
Profit after income tax
Non Cash Flows in Profit
(Profit) / Loss on disposal of fixed assets
Depreciation of fixed assets
Amortisation / impairment of intangible assets
Equity settled share based payments
Changes in Asset and Liabilities Processed Directly in Equity
Changes in Tax Balances Processed Directly in Equity
Changes in Assets and Liabilities
(Increase) / decrease in receivables
(Increase) / decrease in inventories
(Increase) / decrease in other assets
Decrease in payables, accruals and other financial liabilities
Increase in tax balances
Foreign exchange / other non operation movements backed out of assets and liabilities
Net cash provided by operating activities
NOTE 24: Directors’ and Executives’ Compensation
Details of Directors and Key Executives remuneration is disclosed in the Remuneration Report.
Directors’ and Executives’ Compensation by Category
Short term employment benefits
Post employment benefits
Share based payments
Termination benefits
Total
60
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
12
12,872
174
13,058
12
10,627
548
11,187
Consolidated
2013 / 2014
($000)
2012 / 2013
($000)
8,233
9,084
(1)
5,158
289
(87)
(1,627)
-
(926)
(7,140)
(1,632)
3,952
(2,004)
(46)
4,169
126
5,096
67
87
1,034
(409)
(1,114)
(1,658)
(466)
565
(670)
(222)
11,520
Consolidated
2013 / 2014
($)
2012 / 2013
($)
2,231,512
2,186,432
140,772
-
50,000
115,410
44,249
-
2,422,284
2,346,091
For personal use only
NOTE 25: Related Party Transactions
Transactions within the Wholly Owned Group
The wholly owned group includes:
(cid:131)
(cid:131)
The ultimate parent entity in the wholly owned group; and
Wholly owned controlled entities.
The ultimate parent entity in the wholly owned group is Gale Pacific Limited, which is also the parent entity in the Group.
During the financial year, the following transactions occurred between entities in the wholly owned group:
(cid:131)
(cid:131)
(cid:131)
(cid:131)
Sale and purchase of goods totalling $43,695,000 (2013 : $30,414,000)
Gale Pacific Limited received interest income from its subsidiaries totalling $732,000 (2013 : $614,000)
Gale Pacific Limited made interest payments to its subsidiaries totalling $7,000 (2013 : $1,000)
Reimbursement of certain operating costs totalling $455,000 (2013 : $430,000)
Transactions with Directors and Director Related Entities
The following amounts were payable to Directors and their Director related entities as at the reporting date.
Current – Accrued Director fees and superannuation contributions
Consolidated
2013 / 2014
($000)
15,417
2012 / 2013
($000)
-
NOTE 26: Controlled Entities
Parent Entity
Gale Pacific Limited 1
Controlled Entities
Gale Pacific (New Zealand) Limited
Gale Pacific FZE
Gale Pacific Special Textiles (Ningbo) Limited
Gale Pacific Trading (Ningbo) Limited
Gale Pacific USA Inc
Zone Hardware Pty Ltd 2, 3
Riva Window Fashions Pty Ltd 2, 3
Country of Incorporation
Ownership Interest (%)
2013 / 2014
2012 / 2013
Australia
New Zealand
United Arab Emirates
China
China
United States of America
Australia
Australia
-
100%
100%
100%
100%
100%
100%
100%
-
100%
100%
100%
100%
100%
100%
100%
1 Gale Pacific Limited is the head entity within the tax consolidated group.
2 These companies are members of the tax consolidated group.
3 These wholly owned subsidiaries are small proprietary companies and are relieved from the requirement to prepare and lodge an audited financial report.
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 61
For personal use only
NOTE 27: Financial Instruments
Financial Risk Management
Overview
The Group’s activities expose it to a variety of financial risks: credit risk; liquidity risk; and market risk (including foreign currency risk
and interest rate risk).
The Group’s financial risk management processes and procedures seek to minimise the potential adverse effects on the Group’s
financial performance that may occur due to the unpredictability of financial markets. Risk management policies are reviewed
regularly to reflect changes in market conditions and the Group’s activities.
Financial Instruments
Derivative financial instruments are used by the Group to limit exposure to exchange rate risk associated with foreign currency
transactions. Derivative financial instruments are recognised in the financial statements. Transactions to reduce foreign currency
exposure are undertaken without the use of collateral as the Group only deals with reputable institutions with sound financial
positions. The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative
purposes.
Net Fair Values
The net fair value of assets and liabilities approximates their carrying value. No financial assets or financial liabilities are readily
traded on organised markets in standardised form other than forward exchange contracts.
(a).
Credit Risk
Exposure to Credit Risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at the reporting date to
recognised financial assets is the carrying amount of those assets, net of any provisions for doubtful debts of those assets.
The maximum exposure to credit risk at the reporting date was:
Consolidated
Note
As at 30 Jun 2014
($000)
As at 30 Jun 2013
($000)
The maximum exposure to credit risk at the reporting date was:
Loans and receivables
Cash and cash equivalents
Tradeable foreign currency forward contracts
Total
The maximum exposure to credit risk for trade receivables at the
reporting date by geographic region was:
7
6
9
Australasia
China
Americas
Middle East
Total
The ageing of trade receivables not impaired at the reporting date was:
Not outside credit terms
Outside credit terms 0-30 days
Outside credit terms 31-120 days
Outside credit terms 121 days to one year
More than one year
Total
The ageing of impaired receivables at the reporting date was:
Outside credit terms 121 days to one year
More than one year
Total
19,751
13,058
-
32,809
5,481
999
9,524
3,316
19,320
17,600
997
585
32
106
19,026
11,187
1,580
31,793
6,786
509
8,132
3,166
18,593
14,318
3,072
985
204
14
19,320
18,593
64
-
64
71
295
366
62
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
NOTE 27: Financial Instruments (continued)
(b).
Liquidity Risk
The following tables detail both the Group’s effective weighted average interest rates on classes of its financial liabilities at
reporting date and the contractual maturity of these financial liabilities. Contractual cash flows include both interest and
principal cash flows, are undiscounted and based on the earliest date on which the Group can be required to pay.
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to
the Group’s reputation.
Consolidated
30 June 2014
Note
Trade and Other
Payables
Trade payables
Sundry payables and
accruals
Non Derivative
Financial Liabilities
Bank loans
Other loans
Derivative Financial
Liabilities
Foreign currency
forward exchange
contracts used for
hedging
Total
13
13
14
14
15
Consolidated
30 June 2013
Note
Trade and Other
Payables
Trade payables
Sundry payables and
accruals
Non Derivative
Financial Liabilities
Bank loans
Other loans
Total
13
13
14
14
Weighted
Average
Effective
Interest Rate
(%)
Contractual Cash Flows Maturing In:
Carrying
Amount
Contractual
Cash Flows
Less Than
6 Months
6 To 12
Months
1 To 2
Years
2 To 5
Years
($000)
($000)
($000)
($000)
($000)
($000)
8,086
5,223
8,086
5,223
8,086
5,223
-
-
-
-
3.77
6.96
23,000
23,000
23,000
1,274
1,274
288
-
297
-
530
-
-
-
159
709
-
-
-
-
-
38,292
37,583
36,597
297
530
159
Weighted
Average
Effective Interest
Rate
(%)
Carrying
Amount
Contractual
Cash
Flows
Contractual Cash Flows Maturing In:
Less Than
6 Months
6 To 12
Months
1 To 2
Years
2 To 5
Years
($000)
($000)
($000)
($000)
($000)
($000)
7,740
3,984
7,740
3,984
7,740
3,984
3.95%
6.96%
13,650
13,650
13,650
725
725
133
26,099
26,099
25,507
-
-
-
-
-
-
-
-
-
130
130
275
275
187
187
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 63
For personal use only
NOTE 27: Financial Instruments (continued)
(c). Market Risk
The Group’s activities expose it to the financial risks of changes in the market rates for foreign currency exchange rates and
interest rates.
Foreign Exchange Risk
The Group undertakes transactions denominated in foreign currencies that exposes it to fluctuations in foreign currency
exchange rates.
Foreign Exchange Contracts
The Group enters into foreign exchange contracts to buy and sell specified amounts of foreign currency in the future at
stipulated exchange rates. The objective of entering into forward exchange contracts is to protect the Group against
exchange rate movements for both contracted and anticipated future sales and purchases undertaken in foreign currencies.
There was no cash flow hedge ineffectiveness during the reporting period.
The Group adopts hedge accounting and classifies forward exchange contracts as cash flow hedges where these contracts
are hedging highly probable forecasted transactions and they are timed to mature when the cash flow from the underlying
transaction is scheduled to occur. Cash flows are expected to occur during the next financial year. Changes in fair value on
forward exchange contracts designated as cash flow hedges are taken directly to equity.
Forward exchange contracts that are not designated as cash flow hedges have any changes in fair value recognised in
profit or loss in the period the changes occur.
The fair value of the amount of foreign currency the Group will be required to pay or purchase when settling the bought
forward exchange contracts should the counterparty not pay the currency it is committed to deliver to the Group has been
recognised in the Group’s statement of financial position. At balance date the net amount payable was $709,000 (2013 :
$1,580,000 receivable).
The accounting policy in regard to forward exchange contracts is detailed in Note 1(p).
Average Exchange
Rate
Foreign Currency
Contract Value
Fair Value
Fair
Value
Hierarchy
2013 /
2014
2012 /
2013
2013 /
2014
(FC000)
2012 /
2013
(FC000)
2013 /
2014
($000)
2012 /
2013
($000)
2013 /
2014
($000)
2012 /
2013
($000)
Foreign Exchange Contracts
Designated as Cash Flow
Hedges
Buy United States dollars /
sell Australian dollars
Less than 6 months
0.8943
1.0035
13,130
12,350
14,682
12,307
6 – 12 months
0.8985
0.9452
2,100
8,900
2,337
9,416
(108)
(557)
1,130
Level 2
400
Level 2
Buy United States dollars /
sell Chinese renminbi
Less than 6 months
6.2256
6.1510
16,600
1,600
16,756
1,639
(44)
50
Level 2
Total
(709)
1,580
64
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
NOTE 27: Financial Instruments (continued)
Foreign Exchange Risk Sensitivity
The Group is mainly exposed to United States dollars, Euros and New Zealand dollars in its Australian operation and
Australian dollars in its foreign operations.
The following table details the Group’s sensitivity to a 10% (2013: 10%) increase or decrease in the Australian dollar
against these currencies. This analysis includes only unhedged foreign currency denominated monetary items, as shown at
the carrying value, and details the profit effect from each of these items of a 10% strengthening in the Australian dollar on
the reporting date with all other variables held constant. For a weakening of the Australian dollar there would be an equal
and opposite impact on profit to that shown on the following page.
30 June 2014
Consolidated
Australian Dollar
Carrying Value
Australian Entities
($000)
Australian Dollar
Carrying Value
Foreign Entities
($000)
Profit / (Loss)
AUD +10%
Equity
AUD +10%
($000)
($000)
Financial Assets
Cash and cash equivalents
United States dollars
Chinese renminbi
New Zealand dollars
UAE dirham
Trade receivables
United States dollars
Chinese renminbi
New Zealand dollars
Amounts receivable from related parties
United States dollars
New Zealand dollars
Foreign currency forward contracts
United States dollars
Financial Liabilities
Trade payables
United States dollars
Chinese renminbi
Euro
New Zealand dollars
UAE dirham
Borrowings
United States dollars
Chinese renminbi
Foreign currency forward contracts
United States dollars
Profit or (loss) impact
Currency Asset / (Liability) Breakdown
United States dollars
Chinese renminbi
Euro
New Zealand dollars
UAE dirham
Profit or (loss) impact
6,066
-
1
-
-
-
-
-
-
-
374
-
-
-
-
-
-
665
5,692
-
-
1
-
3,234
448
305
513
13,970
84
224
-
-
-
671
3,889
86
139
130
-
-
44
16,533
(3,357)
(86)
390
383
(607)
-
-
-
-
-
-
870
(39)
-
37
-
-
-
-
-
-
-
261
300
-
-
(39)
-
261
(323)
(45)
(31)
(51)
(1,397)
(8)
(22)
-
-
-
67
389
9
14
13
-
-
(4)
(1,385)
(1,653)
336
9
(39)
(38)
(1,385)
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 65
For personal use only
NOTE 27: Financial Instruments (continued)
30 June 2013
Consolidated
Australian Dollar
Carrying Value
Australian Entities
($000)
Australian Dollar
Carrying Value
Foreign Entities
($000)
Profit / (Loss)
AUD +10%
Equity
AUD +10%
($000)
($000)
Financial Assets
Cash and cash equivalents
United States dollars
Chinese renminbi
Euro
New Zealand dollars
UAE dirham
Trade receivables
United States dollars
Chinese renminbi
New Zealand dollars
Amounts receivable from related parties
United States dollars
New Zealand dollars
Foreign currency forward contracts
6,373
-
64
5
-
-
-
-
-
-
United States dollars
1,530
Financial Liabilities
Trade payables
United States dollars
Chinese renminbi
Euro
New Zealand dollars
UAE dirham
Borrowings
United States dollars
Chinese renminbi
Profit or (loss) impact
Currency Asset / (Liability) Breakdown
United States dollars
Chinese renminbi
Euro
New Zealand dollars
UAE dirham
Profit or (loss) impact
500
-
-
-
-
-
-
7,403
-
64
5
-
2,950
883
-
95
241
11,758
334
148
-
-
50
2,087
2,800
87
70
102
-
-
12,671
(1,583)
(87)
172
139
(637)
-
(6)
(1)
-
-
-
-
694
14
-
50
-
-
-
-
-
-
114
107
-
(6)
13
-
114
(295)
(88)
-
(9)
(24)
(1,176)
(33)
(15)
-
-
(5)
209
280
9
7
10
-
-
(1,130)
(1,267)
159
9
(17)
(14)
(1,130)
66
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
NOTE 27: Financial Instruments (continued)
Interest Rate Risk
The Group is exposed to interest rate risk as entities in the Group borrow and deposit funds at both fixed and variable
interest rates. Effective weighted average interest rates on classes of financial liabilities are disclosed under liquidity risk.
The Group does not have long term borrowings and does not use interest rate swaps to manage the risk of interest rate
changes.
The following table details the Group’s sensitivity to every 1% increase in interest rates at the reporting date. The analysis
is on its variable rate financial instruments shown in the carrying value and details the profit effect of a 1% increase in
interest rates on these financial instruments with the change taking place at the beginning of the following financial year
and held constant throughout the reporting period. All other variables remain constant.
30 June 2014
Consolidated
Financial Assets
Cash and cash equivalents
Financial Liabilities
Borrowings (all fixed rates instruments)
Total
30 June 2013
Financial Assets
Cash and cash equivalents
Financial Liabilities
Borrowings (all fixed rates instruments)
Total
NOTE 28: Parent Entity Disclosures
Results of the parent entity
Profit for the year
Other comprehensive income
Total
Financial position of the parent entity at year end
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Total equity of the parent entity comprising of:
Contributed equity
Share based payments reserve
Hedging reserve
Retained earnings
Total equity
Parent Entity Commitments
Operating leases
Capital expenditure
Total
Carrying Value
($000)
13,058
(22,997)
(9,939)
Profit / (Loss)
+1% Movement
($000)
131
(230)
(99)
Consolidated
Carrying Value
($000)
11,187
(14,375)
(3,188)
Profit / (Loss)
+1% Movement
($000)
112
(144)
(32)
2013 / 2014
($000)
2012 / 2013
($000)
46
(1,536)
(1,490)
38,141
109,706
30,103
30,142
79,564
71,485
486
(465)
8,058
79,564
2,898
-
2,898
4,554
982
5,536
29,702
102,790
21,380
21,810
80,980
71,338
720
1,071
7,851
80,980
3,115
-
3,115
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 67
For personal use only
NOTE 29: Business Combinations
(a).
Summary Of Acquisition
On 30 November 2012 the parent entity acquired the assets of Highgrove (Victoria) Pty Ltd. Highgrove specialises in the
marketing and distribution of branded home improvement products including glass fencing, frameless shower screens,
glass safety mirrors and kitchen splashback panels. The initial accounting for the acquisition was provisionally determined at
the end of the financial year 2012 / 2013. As at 30 June 2014, the accounting was completed with no material adjustment
made during the year.
Details of the purchase consideration, the net assets acquired and goodwill are as follows.
Purchase consideration (refer to (b))
Consideration paid
Shares issued
Deferred consideration payable
Total consideration
The assets and liabilities recognised as a result of the acquisition are as follows:
Inventories
Plant and equipment
Provision for employee entitlements
Deferred tax asset
Total tangible net assets acquired
Add goodwill
Net assets acquired
($000)
3,399
350
49
3,798
631
36
(69)
21
619
3,179
3,798
The goodwill will not be deductible for tax purposes. Goodwill arising from the acquisition of Highgrove is mainly
attributable to the expected synergies and revenue growth opportunities.
Shares Issued
1,297,738 shares were issued as part of the consideration. The issue price of $0.2697 was based on the weighted average
share price for the ten days prior to 30 November 2012.
(b).
2012 / 2013 Purchase Consideration – Cash Outflow
Acquisition Related Costs
Cash consideration
Outflow of cash – investing activities
($000)
3,399
3,399
68
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
NOTE 30: Subsequent Events
The Company has announced a major organisational restructure which will streamline the Group's operations, shorten reporting
lines and reduce administrative duplication. Nick Pritchard, previously Managing Director of the Australasian business, has been
appointed Group Managing Director. As a result of this change Peter McDonald, the previous Managing Director and Chief
Executive Officer, has left the company.
NOTE 31: Company Details
The registered office of the Company is:
Gale Pacific Limited
145 Woodlands Drive
Braeside, Victoria, 3195
Australia
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 69
For personal use only
Additional Securities Exchange Information
In accordance with ASX Listing Rule 4.10, the Company
provides the following information to shareholders not
elsewhere disclosed in this Annual Report. The information
provided is current as at 12 August 2014 (Reporting Date).
Distribution of Holders of Equity
Securities as at 12 August 2014
Corporate Governance Statement
The Company has prepared a Corporate Governance
Statement which sets out the corporate governance
practices that were in operation throughout the financial
year for the Company. In accordance with ASX Listing Rule
4.10.3, the Corporate Governance Statement will be
available
on Gale Pacific’s website
(www.galepacific.com), and will be lodged with ASX at the
same time that this Annual Report is lodged with ASX.
review
for
Ordinary Fully Paid Shares
Range
Total
Holders
Units
% Issued
Capital
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
116
280
228
731
228
33,036
861,876
1,852,138
28,891,450
0.01
0.29
0.62
9.71
265,835,896
89.36
Total
1,583
297,494,396
100.00
Number of Holdings of Equity
Securities as at 12 August 2014
Less Than Marketable Parcels of
Ordinary Shares
As at the reporting date, the number of holders in each class
of equity securities on issue in Gale Pacific is as follows:
The number of holders of less than a marketable parcel of
ordinary shares as at the Reporting Date is as follows:
The fully paid issued capital of the Company consisted of
297,474,396 ordinary fully paid shares held by 1,583
shareholders. Each share entitles the holder to one vote.
13 holders have been granted 3,700,000 performance rights
over ordinary shares. Performance rights do not carry a right
to vote.
Unmarketable Parcels
as at
12 August 2014
Minimum $500 parcel
at $0.255 per unit
Minimum
Parcel Size
UMP
Holders
Units
1,961
169
114,533
Voting Rights of Equity Securities
The only class of equity securities on issue in the Company
which carry voting rights is ordinary shares.
As at the Reporting Date, there were 1,583 holders of a total
of 297,474,396 ordinary shares of the Company. The voting
rights attaching to the ordinary shares, set out in Article 54
of the Company’s Articles of Association are:
“Subject to any rights or restrictions for the time being
attached to any class or classes of shares:
(cid:131)
(cid:131)
at meetings of members or classes of members
each member is entitled to vote in person or by
proxy or attorney; and
on a show of hands every person present who is a
member has one vote, and on a poll every person
present in person or by proxy or attorney has one
vote for each ordinary share he holds.”
Substantial Shareholders as at
12 August 2014
As at the Reporting Date, the names of the substantial
holders of Gale Pacific and the number of equity securities
in which those substantial holders and their associates have
a relevant interest, as disclosed in substantial holding
notices given to Gale Pacific, are as follows:
Shareholder
THORNEY HOLDINGS
PTY LTD
WINDHAGER HANDELS
GESMBH
INVESTEC BANK
(AUSTRALIA) LIMITED
Class of
Securities
No.
%
shares
79,702,646
26.79
shares
41,925,781
14.09
shares
19,794,793
6.65
70
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only
Number of Holders
Other Information
As at the Reporting Date, the number of holders in each
class of equity securities on issue in Gale Pacific is as
follows:
Twenty Largest Holders of Quoted
Equity Securities as at
12 August 2014
The Company only has one class of quoted securities, being
ordinary shares. The names of the 20 largest holders of
ordinary shares, and the number of ordinary shares and
percentage of capital held by each holder is as follows:
Shareholder
No.
%
HSBC CUSTODY NOMINEES
(AUSTRALIA) LIMITED
72,671,525
24.43
WINDHAGER HANDELS GESMBH
41,925,781
14.09
The name of the Company Secretary is Ms Sophie Karzis.
The address of the principal registered office in Australia,
and the principal administrative office is 145 Woodlands
Drive, Braeside, 3195, Victoria, Australia, telephone is +61
(3) 9518 3333. The Company is listed on the Australian
Securities Exchange. The home exchange is Melbourne.
Registers of securities are held by Computershare Investor
Services Pty Limited, Yarra Falls, 452 Johnston Street,
Abbotsford, Victoria, 3067, Australia, local call is 1300 850
505, international call is + 613 9415 4000.
Stock Exchange Listing
Gale Pacific’s ordinary shares are quoted on the Australian
Securities Exchange (ASX issuer code: GAP)
Voluntary Escrow
INVESTEC INVESTMENTS (UK)
LIMITED
14,182,685
4.77
There are no securities on issue in Gale Pacific that are
subject to voluntary escrow.
GALE AUSTRALIA PTY LTD
13,927,844
4.68
J P MORGAN NOMINEES AUSTRALIA
LIMITED
9,347,355
3.14
Unquoted Equity Securities
UBS NOMINEES PTY LTD
7,718,384
2.59
GERNIS HOLDINGS PTY LIMITED
7,409,665
2.49
INVESTEC AUSTRALIA LIMITED
5,612,108
1.89
CONTEMPLATOR PTY LTD
MR GEOFFREY DUNCAN NASH
STITCHING PTY LTD
3,691,433
1.24
3,327,428
1.12
Shares
Options
3,000,000
1.01
Convertible Notes
The number of each class of unquoted equity securities on
issue, and the number of their holders, are as follows:
Class of Equity
Securities
Number of
unquoted Equity
Securities
Number of holders
0
0
0
0
0
0
13
Performance Rights
3,100,000
HAROLDSWICK CORPORATION PTY
LTD
2,500,000
0.84
CHILLEN PTY LIMITED (TALLEN)
2,431,317
0.82
GFS SECURITIES PTY LTD
2,380,935
0.80
GALLIUM PTY LTD
2,279,359
0.77
There are no persons who hold 20% or more of equity
securities in each unquoted class.
On Market Buyback
VENN MILNER SUPERANNUATION
PTY LTD
2,000,000
0.67
The Company is not currently conducting an on-market buy-
back.
ATKONE PTY LTD
W DONNELLY SERVICES PTY LTD
APM ENTERPRISES PTY LTD
1,919,796
0.65
1,905,485
0.64
1,816,599
0.61
GDL INVESTMENTS PTY LIMITED
1,800,694
0.61
Top 20 holders of Ordinary Fully Paid
Shares as at 12 August 2014
201,848,393
67.85
Total Remaining Holders Balance
95,626,003
32.15
Item 7 Issues of Securities
There are no issues of securities approved for the purposes
of item 7 of section 611 of the Corporations Act which have
not yet been completed.
GALE PACIFIC LIMITED
2014 ANNUAL REPORT 71
For personal use only
OFFICE LOCATIONS
Australia
PO Box 892
145 Woodlands Drive,
Braeside, Victoria, 3195,
Ph: +61 3 9518 3333
Toll Free 1800 331 521
China
777 Hengshan West Road,
Beilun, Ningbo, 315800
Ph: +86 574 5626 8888
Middle East
PO Box 17696
Jebel Ali, Dubai, U.A.E.
Ph: +971 4 881 7114
New Zealand
Unit 9, 39 Apollo Drive,
Rosedale, Auckland, 0632
Ph: + 64 9 479 9119
Toll Free: 0800 555 171
United States
Suite 1704, 285 West Central Parkway,
Altamonte Springs, Florida, 32714
Ph: +1 407 333 1038
72
GALE PACIFIC LIMITED
2014 ANNUAL REPORT
For personal use only